ACADEMIC YEAR 2007 – 2008
Grade: ………………
Course No. & Title: Marketing Research
Programme of Study: Postgraduate
Semester: Spring
Instructor’s Name:
Assignment due date:
Title of the Assignment: Research Proposal. Affecting Customers Loyalty.
Student’s Name :
Chapter 1.
Affecting Customers Loyalty. Background and Justification for Selection of the Topic.
In today’s competitive markets services and service companies within the same industry are becoming increasingly similar. Differentiation through the delivery channel (i.e. delivery of services against payment) is difficult. A growing number of service companies have embarked on a journey of positioning through the communication channel (i.e. advertising and
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1970). Exit implies that the customers stop buying the company's services while voice is customer complaints expressing the consumers dissatisfaction directly to the company. Customers' exit or change of patronage will have an impact on the long-term revenue of the company. Customers may be loyal due to high switching barriers or lack of real alternatives. Customers may also be loyal because they are satisfied and thus want to continue the relationship. History has proven that most barriers to exit are limited with regard to durability; companies tend to consider customer satisfaction the only viable strategy in order to keep existing customers. Several authors have found a positive correlation between customer satisfaction and loyalty (Bearden and Teel 1980;Bolton and Drew 1991; Fornell 1992; Anderson and Sullivan 1993). Based on the future discussion, the following two hypotheses are proposed:
Hypothesis 1: Factors such as satisfaction, trustworthiness, importance of relationship and image have a positive influence on loyalty.
Objective 1: To indicate any relationship between loyalty and such pshycological factors as satisfaction, importance of relationship and others.
Hypothesis 2: The relevance of factors affecting loyalty depends on the levels of loyalty of customers.
Objective 2: Define and dwell upon the levels of loyalty of customers, examin them.
The
Thus, companies seek to strengthen customer loyalty. Brand loyalty is considered to tilt the consumer to purchase the package / product specific brand (Jacoby and Chestnut, 1978). Later, Oliver (1997) defined loyalty as "a deeply held commitment to REBUY or repatronize preferred product / service consistently in the future, thereby causing repetitive same-brand or same brand set purchasing, despite situational influences and marketing activities, which would result in causing switching behavior "(p. 34). This conceptual definition covers two different aspects of loyalty: the behavioral. This is consistent with an integrated conceptual framework proposed by Dick and Basu (1994), that customer loyalty is regarded as a "power relationship between the relative position of the individual and repeat
7. Consumer loyalty needs to be increased: - The main recommendation is to increase the good relationship with the consumer at all. The reason is that if there is a good relationship between the organisation and the consumer then the benefit will be to the organisation as good relationship sometimes helps to reduce expense on the other factors like huge expense that is done on the advertising of the brand of the organisation. In Asian markets, areas such as relationship building and a ‘benefit-the-country’ attitude are sometimes more important than investing enormous amounts on advertising (LaForet and Chen, 2012).
This research aims to know the influence of product quality and customer satisfaction toward customer loyalty. This type of research is a research
It’s essential that companies or businesses today listen to their customers. No company or business today can afford to disregard the importance of customer satisfaction and loyalty. Aren’t they the same thing? No, they are absolutely not and they are enormously
According to A Theory of Multidimensional Brand Loyalty (Sheth & Park, 1974), brand loyalty was a positive bias toward the brand and they classified brand loyalty behavior into three dimensions. Firstly, emotive tendency, it relate to positive emotion toward favorable brand than other brands such as likeliness, premium-value, etc. Secondly, evaluation tendency, it relate to positive evaluation toward the particular brand. For instance, consumer may evaluate particular brand that it has higher performance, which affect the utility of product, so they intend to buy the particular brand over the other brands due to the positive evaluation. Thirdly, behavioral tendency, it relate to the trust on physical activities of brand. The consumer may trust on the brand and consume it even they have to pay in advance. Hence, this behavior needs to learn from buying experience and consuming product of the brand as usual. Moreover, Sheth and Park stated that at least one of these three dimensions could create brand loyalty. Hence, as showing in Figure1, there would
All the respondents regardless of position in the company argued that creating a loyal customer
The research results showed that product quality was not the strongest factor that led to brand loyalty but market inertia and that product quality was more likely to lead
There are no studies which touched on the topic of “loyalty” to hotel brand in Riyadh City in the Kingdom of Saudi Arabia but there are some studies which had discussed the “loyalty” to a brand in other production sectors. For example, the study of (Salh, 2010 ) as it aimed to study the psychological and social factors and its effect on loyalty of mobiles’ buyers to the brand as the study concluded that there is relation between the psychological and social factors of user and mobile brand. The study of (Hasen, 2017) aimed to know the factors which lead to prefer a specific brand and concluded that there are several factors of preference of a specific brand such as quality, price, specifications and mental image of the brand. The study of (Al-Zabi, 2013 ) strived to examine the effect of concepts relevant to the nature of purchasing decisions, mechanism to make these decisions, methods of its evaluation, explain the types reference groups which affect purchasing decision of consumer of automotive goods and identify the types of effect (informative and standard) and degree of their effect on purchasing decision of consumer of automotive goods. The study of (Al-Khusroom, 2011 ) aimed to know the effect of perceived difference and perceived quality of on consumer’s loyalty to a brand. The study concluded that there is big effect of perceived difference which is created by brand in consumer’s mind in his loyalty towards this brand. Also, the perception of
Customer Satisfaction and Loyalty has become, throughout years, not only an important marketing tool but also an integrated part of a company structure. Competition has become fierce and competitors in a market are trying constantly to prove that their products and services are better than others. Therefore, being able to satisfy and retain customers will definitely create a competitive edge over competitors but will also reduce cost while creating long term relationship with customers.
Different authors have given many ideas, perceptions about those factors according to their experiences. Henceforth, an explanation about each factor and the relationship of each factor with the brand loyalty based on prior studies can be shown as
(2006 ) studied and investigated the utility of applying the Investment Model to reveal the psychological processes underlying loyalty formation and an understanding of the structure and antecedents of loyalty .Specifically, the dimensionality of the loyalty construct was studied. Perceived quality and perceived value, two of satisfaction’s related constructs, have also been suggested to either directly or indirectly influence customer loyalty. Cognitive, Affective and conative loyalty together help in formation of attitudinal loyalty which further impacts the behavioral loyalty of customers.
The relationship between customer loyalty and customer satisfaction John T. Bowen University of Nevada, Las Vegas, Nevada, USA Shiang-Lih Chen University of Nevada, Las Vegas, Nevada, USA Keywords Customer loyalty, Customer satisfaction, Database marketing, Hotels Abstract Develops and implements a method for hotels to identify attributes that willincrease customerloyalty. Otherhotels can replicate the methodology used in this study. The study makes the uses of the hotel’s database to draw samples for both focus groups and a mail survey.
In the end, loyal customers drive the company to better work conditions, better working environment that can lead to better internal relationships among employees and values sharing. Loyal customers can change the mind-set of a corporate culture and they could also change the culture
In the initial part of study, it has elaborate meaning of loyalty. Now, this section has presented literature on effectiveness of loyalty on customer retention. Loyalty program often considered as value sharing or enhancement instrument. Sabol, 2002) addressed that value enhancement function is important because of ability to provide superior value to customer relationship and retention. Loyalty program provide value to consumer in two stages. (Bolton, 2000), has explained stages in brief that in the first stage program points are issued to customer and the second stage when customer redeemed those points. Though these points value don’t have any practical value unless customer redeemed them. However, according to the study by (Machanda, 2004) showed that it has important psychological meaning to customer. Points accumulation can gives customer feelings of benefits and these benefits are able to give customer positive value perception. It is because customer can redeemed those values later for rewards. At redemption stage, customer receives both economic and psychological value. Thus it enhances appreciation and recognition of
The concept of Brand loyalty is defined in terms of 6 necessary and sufficient conditions. These conditions are as follows: -