Assessing the relationship between loyalty program attributes, store satisfaction and store loyalty

After a decade of research there is still much to understand about the relationship between loyalty programs and whether they deliver on their promise of building customer loyalty towards a store and understanding the mediating role of store satisfaction. Our results suggest that loyalty program as a summary construct, explains a significant proportion of the variance in store satisfaction and store loyalty. However, disaggregation of the construct into hard versus soft attributes, promotes greater specificity, precision and accuracy in uncovering the differential impact on store satisfaction and store loyalty.     

Factors that influence manufacturer and store brand behavioral loyalty

This study examines the factors that are linked to consumer goods brands having unusually high or low behavioral loyalty, after controlling for the association between brand size and loyalty that occurs due to the ‘double jeopardy’ effect. Behavioral, or repeat-purchase loyalty is measured as the brand's average share of category requirements (in volume) among its buyers over a 12-month period. We examine a range of factors that theory or past evidence suggests are associated with higher or lower behavioral loyalty, including brand type (store brand/manufacturer brand), price level, promotion intensity, as well as average brand volume per occasion and pack size. Using extensive US panel purchasing data, we find that store brands exhibit relatively higher behavioral loyalty than manufacturer brands. We explain the theory behind this result. We also find that the brand's average pack size and volume bought per occasion has a markedly positive association with behavioral loyalty. Finally, we find that the effect of low price on excess loyalty is moderated via a positive association with average volume purchase per occasion. These findings add to the body of knowledge relating to patterns in behavioral brand loyalty for both manufacturer and store brands, as well as the marketing-mix factors that influence it.     

The impact of hard discounter presence on store satisfaction and store loyalty

Hard discounters, such as Aldi and Lidl, have become more important in the last decade. Recent research suggests that the presence of a hard discounter (HD) decreases customers’ share of wallet. In this study, we aim to understand why this occurs, by considering how HD presence affects store attributes and store satisfaction. In particular, we investigate whether HD presence affects store satisfaction formation as well as the effect of store satisfaction on share of wallet. We analyze Dutch data on store attribute evaluations, store satisfaction and share of wallet. Our results show that HD presence decreases convenience evaluations of a store, satisfaction and share of wallet. Moreover, we show that the relationship between convenience and store satisfaction becomes more important when a HD is present, while we then also find a stronger positive relationship between satisfaction and share of wallet. Simulations based on our model estimations show that especially price-oriented retailers should fear decreases in share of wallet when a HD is present.     

How category characteristics affect the number of store brands offered by the retailer: a model and empirical analysis

Our research examines why retailers offer, not one, but multiple store brands in some product categories. More specifically, we are interested in how certain product category characteristics affect the number of store brands. We model a product category consisting of two incumbent national brands that may differ in strength. The retailer may introduce one or two store brands depending on which maximizes category profits. Our analysis suggests that the retailer is likely to carry two store brands in categories where (i) the national brands are similar in strength; and (ii) the price sensitivity between the national brands is low. Interestingly, the conditions that support the introduction of more than one store brand are quite different than the conditions that would facilitate the introduction of additional national brands. We provide empirical evidence that support our model-based predictions.     

Store brands and retail differentiation: the influence of store image and store brand attitude on store own brand perceptions

Store's own brands can provide important opportunities for retail differentiation if they are considered by consumers to be uniquely associated with store image. A survey of shoppers measured attitudes toward individual stores’ images and store brand perceptions, as well as general attitudes toward store brands. A regression analysis demonstrates a positive relationship between consumers’ perceptions of individual store own brands and their associated store's image dimensions and attitudes toward store brands in general.     

Retail relationships and store loyalty: A multi-level perspective

An important factor in retail store loyalty is interpersonal relationships between retail salespeople and customers. However, relationships can also exist at the person-to-store level. This paper examines the linkages between trust in a salesperson, trust in the store, and repeat purchase intention. A model of store loyalty which includes relationships at both the person-to-store as well as person-to-person level is tested. The findings reveal that for those with an interpersonal relationship, trust and commitment to the salesperson are directly linked with purchase intention as well as indirectly through store attitude. For customers without a salesperson relationship, trust in the store leads to loyalty indirectly through store attitude, but does not have a direct impact on purchase intention. The results illustrate the existence of multi-level relationships between customers and stores and how those relationships link to store loyalty. The research adds to our understanding of the complexity of relationship retailing, while providing further evidence of the value of generating and maintaining interpersonal relationships as a retail strategy.     

Generalizations regarding the growth and decline of manufacturer and store brands

Stimulating growth or staving off decline in market share are core objectives for brand managers, including retailers who now offer store brands (SBs). This study identifies how changes in brand penetration and repeat-purchase loyalty accompany changes in brand share. We examine 1093 changes in brand share over 63 packaged goods categories in the UK from 2003 to 2007, covering both growth and decline. Two measures of repeat purchase loyalty are used—annual purchase frequency (PF) and share of category requirements (SCR). Our results show that brand share growth is accompanied by greater change in penetration than in loyalty, at a ratio of approximately 3:1. This finding generalizes across brand type, loyalty measure, retailer SB or manufacturer brand (MB), category purchase frequency, category type, and initial brand share. However, while brand share growth is accompanied by stronger changes in SCR than PF for MBs; the reverse is the case for SBs. For MB decline, both penetration and SCR change are significant correlates. However for SBs, the decline in brand share happens predominantly in loyalty—more strongly in SCR, followed by PF. Therefore, both brand types need to focus on building penetration to grow. While MBs also need to prevent light buyers from lapsing, SBs need to pay more attention to retaining heavy buyers to avoid repertoire demotion.     

The influence of price and brand loyalty on store brands versus national brands

Abstract

This article investigates how price and brand loyalty of three frequently purchased product categories can influence the purchase decision process of store brands versus national brands. A multinomial logit model was constructed to analyse the data obtained from a consumer panel. The results confirmed that brand loyalty is the main variable which influences the purchase decision process of both national and store brands. The influence of price on the purchase decision process is product specific. There is a clear distinction between the buyer's profile of store brands and national brands. But there is no evidence of any correlation between demographic variables and national brands or store brands.     

Interplays between manufacturer advertising and retailer store brand introduction: Agency vs. wholesale contracts

In retail supply chains, manufacturers' advertising for national brands and retailers' store brand introduction may relate to each other, and two types of contracts, i.e., agency contract and wholesale contract, are widely used. This paper uses game-theoretic models to investigate the strategic interaction between a manufacturer's advertising strategy and a retailer's store brand introduction strategy. We derive the equilibrium outcomes, including wholesale price, retail price, market demand, retailer's and manufacturer's profits under different contract forms. We find that when the product cost is small relative to the perceived value of the store brand, the introduction of a store brand will benefit the retailer. The retailer is more likely to introduce store brands under the wholesale contract than under the agency contract. In addition, compared with the wholesale contract, the agency contract may increase both the manufacturer's and the retailer's profits and lead to Pareto improvement for them.     

An adaptive nonlinear approach for estimation of consumer satisfaction and loyalty in mobile phone sector of India

To facilitate business growth assessment of customer׳s, satisfaction and loyalty levels in mobile sector are two important issues which need in-depth investigation. These two levels of customers are nonlinearly related to their corresponding attributes. The past studies have mostly assumed linear relation and have mostly used regression based models for estimation of these levels and the results are not encouraging. To overcome this limitation, the present study has developed simple nonlinear models for accurate estimation of these two parameters using their related key factors and results obtained are shown to be much better. This paper has also observed the positive effect of satisfaction on the loyalty estimation of customers. Employing the proposed nonlinear adaptive models, the service provider can also predict the satisfaction and loyalty levels of each of its customers which help the organization to determine the number of possible future churners.     

Implementing online store for national brand competing against private label

We propose a game-theoretic model in three contexts. First, only the national brand (NB) is offered through a traditional retailer. Second, the private label (PL) is introduced by the traditional retailer. Finally, the NB's manufacturer opens an online store. We reassess the benefit of introducing the PL and investigate the profitability of implementing an online store. We found that the retailer is not always enjoying the PL's introduction. Also, the manufacturer could benefit from that strategy. The quality differential between the NB and the PL, the PL's potential and the cross-price competitions are all important factors to determine the result of PL's introduction. Hence, the manufacturer opens the online store either to counter the threat of such strategy or to expand his market.     

Re-thinking the relationship between store brand attitude and store brand loyalty: a simultaneous approach

Academic attention to the relationship between store brand attitude and store brand loyalty is insufficient. Our paper fills this research gap by proposing and testing a theoretical model that demonstrates a reciprocal and mutually-reinforcing relationship between store brand attitude and store brand loyalty. The literature review identifies independent variables as potential predictors of both characteristics. We apply a two stages least squares model to data that come from a survey of Spanish households. The findings corroborate some of the propositions of the conceptual model: the reciprocal relationship between the two dependent variables; the influence of risk, deal proneness, price and value consciousness and extrinsic and intrinsic cues on store brand attitude; and the influence of exploration, deal proneness, store loyalty, store brand trust and store brand affective commitment on store brand loyalty.     

Sustainable growth for the self-employed in the retail industry based on customer equity,customer satisfaction,and loyalty

In Korea, traditional retail districts face a serious situation whereby businesses in downtown areas face collapsing as local population declines: resulting in a decrease in self-employed sales and a declining local economy. Traditional retailers use ambiguous accounting and are reluctant to use credit cards, and thus, the overall reliability of their customer data is low. This paper solves this problem by applying the concept of customer equity (CE). We conducted an empirical analysis through questionnaires to identify differences in CE between traditional and new retail formats. The questionnaire consisted of questions related to CE (value equity, brand equity, relation equity), satisfaction, loyalty, and demographic characteristics. CE and satisfaction were measured on a 5-point Likert scale. A total of 400 surveys were completed, resulting in 391 usable returns for analysis in this study. In the regression analysis between CE and customer satisfaction, both old and new retail firms showed statistically significant effects. In the traditional retail industry, value equity and brand equity were statistically significant, while relation equity were not.     

The influence of customer loyalty program design on the relationship between customer motives and value perception

Despite the strong use in marketing practice, the effectiveness of loyalty programs is still heavily questioned among researchers. In our study we present an empirically tested framework that views customer loyalty programs (CLPs) with their differing designs as a moderating tool in a means-end relationship between customer motives and value. By disentangling customer value perceptions of loyalty programs we contribute to the remaining question of the efficacy of CLPs and set the road for further research. Our results support the argument that CLPs can be an effective tool and are not only something that adds to the value of a product or service, but rather creates value by itself. However, this is only the case for programs that target prevailing customer motives and hence provide a higher level of perceived value.     

The interrelationships among service quality,customer satisfaction,and customer loyalty: Examination of the fast-food industry

The purpose of this study was to use customers’ perspectives to develop a conceptual model for improving service quality and enhancing customer satisfaction and loyalty. The 197 samples were selected from customers of leading fast food franchise enterprises in Taiwan. The research results indicate that service quality positively influences customer satisfaction and customer loyalty. Service quality positively influences customer loyalty through customer satisfaction. The research findings indicate that managers need to ensure they have efficient service quality to enhance customer satisfaction and customer loyalty levels.     

Competition for memory retrieval between private label and national brands

Perceptions of private label brands (PLBs) reside in consumer memory along with national brands (NBs). When a consumer engages in a choice situation, both PLBs and NBs rely on links to retrieval cues in consumer memory to give them a chance of purchase. This study examines the underlying competition between NBs and PLBs across different retrieval cues. The findings show that PLBs link to the same attributes as NBs and so compete with NBs for retrieval. However, while any brand typically competes most with the brands more commonly associated with any specific cue, the study finds evidence of PLB sub-categorization. That is, if a consumer elicits one PLB for a certain cue, he/she has four times the propensity to elicit other PLBs than elicit a NB for that same cue. This heightened propensity suggests that when a consumer learns that one PLB has a particular quality, the consumer generalizes that quality to other PLBs. Therefore, retailers should realize that the image of competitor retailers' PLBs affects the image of their own PLBs.     

Drivers of customer satisfaction in the grocery retail industry: A longitudinal analysis across store formats

The design of satisfactory shopping experiences remains one of the main challenges for building long-term profitability in modern retailing. Therefore, companies are interested in identifying the key drivers of the service execution that shape customer shopping satisfaction. In this study, we developed a standardized questionnaire for evaluating the shopping experience, and conducted a large study in several grocery stores across different formats during a time span of five years. The resulting rich dataset enabled us to uncover interesting patterns using both individual and store-level analyses. Our results indicate that larger store formats are associated with greater satisfaction levels. When looking at the marginal effects of the various elements of customer service, we found that some specific elements of service execution present significant differences across store formats. In addition, we identified loss aversion on shopping experience, since poor performance impacts more on customer satisfaction than superior performance. Finally, our store-level analysis sheds light on how changes in the service performance determine changes in the shopping experience in the same store. These implied results may guide store and chain managers to evaluate the role of the store execution elements better, and to design the customer shopping experience successfully.     

An investigation into the link between consumer's product involvement and store loyalty: The roles of shopping value goals and information search as the mediating factors

This research proposes a theoretical model explaining the roles of multiple mediating factors – product quality, service quality, and information search –in the association between product involvement and store loyalty. The extant literature has examined different determinants of store loyalty but paid less attention to understand the link between product involvement and store loyalty and the underlying mechanisms. This study contributes to the literature by a) providing a comprehensive framework of involvement – loyalty link and b) investigating complex mediation effects. In this study, survey data were subjected to regression analysis to test parallel mediation and serial mediation effects of product quality, service quality, and information search in the link between consumer's product involvement and store loyalty. The results indicate that both product quality and information search mediate the association between product involvement and store loyalty. In addition, both product quality and service quality mediate the association between product involvement and information search. Results also indicate that product quality and information search work as serial mediators in the association between product involvement and store loyalty. For additional level of analyses, data were also subjected to Importance-Performance Map Analysis (IPMA). Theoretical and managerial implications are also provided.     

Determinants of customer brand loyalty in the retail industry: A comparison between national and private brands in South Korea

Finding motivations for customer brand loyalty is one of the most popular academic and practical research fields; in this regard, some scholars have explored motivations in the retail industry. As the concept of private brands has been one of the most widely employed strategies for business success in the industry, comparing private and national brands in terms of customer loyalty is an important topic in the retail industry. Thus, the current research focuses on exploring antecedents of customer loyalty in private and national brands, as well as investigating whether there are notable structural differences between the brands. The results, based on 1,631 responses, indicate that customer perceived service/product quality, satisfaction, trust, and cost are notable determinants of brand loyalty, while the relationship between customer satisfaction and service quality of private brands is not supported. Moreover, both indirect and direct effects of the employed factors on customer brand loyalty are reported.     

A model of consumer relationships with store brands,personnel and stores in Spain

Abstract

Relationship Marketing is an important approach to the study of exchanges. This approach puts emphasis on the development of trust, satisfaction and relational norms to obtain parties' commitment. However, there are very few studies that consider the different levels the consumer relates with. Moreover, a limited number of marketing studies include variables that are often used in economic approaches such as signalling theory, which can enrich the understanding of commercial relationships. Therefore, the proposed multidisciplinary model relates economic variables—the signals that firms send to the market—and key relational variables—satisfaction and trust—considering three relationship levels of trust and satisfaction—store brands, personnel and stores. Results show a transference process among the three levels of trust and confirm that satisfaction and signals are important antecedents of each trust level.