Category: Loyalty

Abstract

This research paper seeks to investigate the relationship between customers’ perception of public relation and customers’ loyalty. The research will also investigate the role played by the brand image in shaping customer perception towards the organization.

Research Design/methodology- The research will use both primary and secondary sources of data. The primary data will be collected from a sample of customers of City Bank with the help of a questionnaire. The research will use two hypotheses.

Findings- The results of the study evidently demonstrate that the sensitivity of clients towards organization’s public relation practice is an indication of their devotion. From the research, it is clear that when there is a favorable brand image among customers, public relation perception will always have a heavy impact on customer loyalty.

Research limitations/implication- This research seeks to expound on the existing research as regards to customer loyalty. The researcher faced the problem of unwillingness since some respondents were unwilling to answer questions.

Originality- The researcher was concerned with coming up with an original piece of research that could be applied in a real life scenario.

Keywords- Brand image, Public relation, Customer loyalty, Customer relations, Finance industry, financial services, the United States

Introduction

According to Hsieh and Li (2008), there is a direct relationship between customer perception of public relation and customer loyalty. These scholars hold that when a customer has a positive perception of public relations of a firm, he or she will tend to be loyal to that firm. This loyalty will further enhance a positive perception of the public relation of the firm.

Brand image plays a moderating role in this relationship. When a firm has a strong brand image in the market, the perception of the public would always be influenced positively towards the firm, and this will increase loyalty of the customers towards the firm (Hsieh & Li, 2008).

The role of marketing in creating and maintaining a pool of loyal customers is becoming more prominent in the twenty fist century. Marketers are under pressure to ensure that loyalty among customers is established. Customer loyalty is always considered a central pillar in marketing activities of the organization. This is because without customer loyalty, it may not be easy to maintain a positive image of a firm in the market.

When a company is able to develop, maintain, and enhance customer loyalty, it gains a competitive edge in the market hence acquiring the opportunity to increase its market share in the market. Customer loyalty can also enhance the image of the organization through positive word of mouth, which in turn leads to increased profit margins for the company.

Scholars define public relations as the management function, which aims at identifying, establishing, and enhancing mutual benefits between the firm and its public. This would determine the failure or the success of the company. Loyal customers are said to enjoy the public relations practices of the company as compared to those customers who buy and go without staying for long in their in the company.

It is essential for the customers to be aware of the organization-public relation since this will promote customer loyalty in the organization, which would lead to increased number of sales (Aaker, 1997).

A recent study shows that there is intense competition in the finance industry. Numerous financial institutions are in existence meaning that competition is stiff (Chaudhuri, and Holbrook, 2001). The management of Citibank should come up with strategies that would enable it manage this competition.

Developing a public relations system would help in increasing the company’s customer loyalty. This essay aims at explaining the relationship between the brand image, public relations practices, and customer loyalty with focus on offering a professional advice to Citibank on how to enhance customer loyalty.

Literature Review and Hypothesis

The finance industry is increasingly becoming competitive. Financial firms are under pressure to deliver more quality services to their customer in order to increase satisfaction (Belk, 2008). This quality is always formed in the minds of consumers.

Public relation is important in influencing customer perception as regards to a given brand (Anderson, & Gerbing, 2002). The figure below shows the relationship between public relations perception of customers, customer loyalty, and brand image, which is the basis of this research.

From the diagram above, public relations perception is shown to have a direct impact on customer loyalty. The brand image plays a role of moderating the operations of the public relations opinion and customer constancy. This can be illustrated with the help of the literature review below.

Clark (2000) stipulated that self-congruence theory rest on the idea that consumers evaluate the products of a company in relation to their self-image. When the congruence between the two is perceived to be high, it has been revealed that it influences the attitude of customers towards the brand. It also influences the decision made by customers in purchasing the product, as well as determining the satisfaction of customers.

On the other hand, when there is incongruence, consumers are likely to withdraw from purchasing the products and services of the organization simply because they will fear to be associated with the negative image of the organization (Chaudhuri, & Holbrook, 2001).

An individual’s self-concept embraces various self-identities, which range from personal identities to social identities. In the studies that have been conducted before, it has been proved that when public relations practices is strong there is an increased demand for social identity, which in return leads to increased self-congruence (Bruning, 2002).

Public relations practices are therefore entitled to create a profile brand association whereby customers of the organization have to be perceived as generous and kind. They also seek to establish a brand personality where the brand personality is portrayed as being sincere (Brown, & Dacin, 1997).

From the study, it is patent that self-congruence and customer expectations are realized with the help of the top management as expressed through public relations. In this case, if the customer self-concept match with the PR actions, customers are likely to be attached to the company for a long period (Dick, & Basu, 2006).

These scholars observed that public perception towards public relations would always influence customer loyalty. This leads to the first hypothesis below.

Customer perception towards public relations (PRP) will be positively related to customer loyalty

In this hypothesis, psychologists hold the view that the memory of an individual lasts for a very long period meaning that once the information received is stored in it, the information it is likely to stay for a considerable duration.

In the field of marketing, this is referred as the halo effect whereby the influence of a particular attribute is influenced by the general impression of the product as a whole on one hand while on the other hand, the evaluation of an attribute as a whole can create an effect on particular aspects of the object.

This therefore proves that maintaining cognitive consistence helps in deterring cognitive differences (Dutton, Dukerich, & Harquailn, 2004).This indicates that when the brand image of an organization is favorable, the customers, who in return maintain the positive beliefs, and behaviors, will perceive the public relations practices as genuine hence harmonizing the reputation of the company.

However, when consumers perceive brand image in their cognitive processes as unfavorable, it becomes difficult for the PR practices to change this perception.

When there is inconsistency in the memory of customers, they would likely develop a psychological tendency of balanced differences, which creates fear on customers hence a go slow in consuming products and services of that particular company (Ekinci & Riley, 2003). This would lead to the formulation of the second hypothesis, which is stated as below.

The relationship between PRP and customer loyalty is moderated by brand image

Research Methodology

The data of the research were collected from experienced customers of Citibank in the New York branches. This essay looks into the financial firms, as they are the ones, which dictate maximum public relations practices as compared to the manufacturing industry.

The research was conducted in a form of interviews where the sampled customers were asked questions related to insurance companies familiar to them (Chiou and Droge, 2006).

In the research, PRP was considered an independent variable, which was measured in terms of the manner in which customers perceive the commitment of the corporation in terms of time, resources, and efforts towards generating public relations activities.

Brand image on the other hand was used as the moderating variable. In this case, the brand image was measured in terms of experiential benefits, symbolic benefits, and as functional benefits (Ellen, Mohr, & Webb, 2000).

During research, several factors were controlled for the results obtained to be perceived as valid. The controlled factors included sex of respondents, disposable income, altruism, and age.

In the study, altruism was considered the act of utilitarianism, which aims at promoting the welfare of others. In the issue of validity and reliability, the study used various approaches in the analysis of data collected, which includes confirmatory factor analysis, exploratory and reliability analysis (Devellis, 2001).

Analysis of the Results

The results obtained in the research were tested through hierarchical regression. This was aimed at proving the hypotheses that were presented in the study. In relation to the four controlled factors used in the research, it was discovered that altruistic and disposable income variables created an effect on the consumer loyalty.

This indicates that commitment of an organization towards PR activities is likely to increase customer purchases, as well as refer other people to buy company products (Homburg, & Giering, 2001).

In the second hypothesis, PR practices are said to depend on the level of brand image. The brand image is seen as a factor that controls the connection between public relation and consumer allegiance. In the analysis, the results were split into groups of favorable and unfavorable brand image.

It was revealed that a good brand image preserves customer allegiance while inauspicious brand image generates a harmful result to client fidelity (Ellen, Mohr, & Webb, 2000). The management should always ensure that the brand image is improved through such avenues as advertising.

Discussion of the Findings

This study is dedicated to explaining the influence of PRP on customer loyalty since it has investigated how the attitudes towards a brand image affect the relationship. It has been discovered through research that when the brand image of an organization is strong, the PRP is likely to affect the customer loyalty positively.

In the analysis of the results, it was also realized that when the perception of the customers is higher towards the PRP, the customer loyalty would also increase (Garbarino, & Johnson, 1999).

In the second hypothesis, the results indicate that brand image acceptance raises the level of customer loyalty towards a corporation. It is therefore suggested that the needs of consumers help in developing products and services of the company. It was concluded that the brand image, as well as the corporate image, could affect the attitudes and beliefs of the company either positively or negatively (Fredericks, Hurd & Salter, 2001).

The management of Citibank should come up with mechanisms that would help in improving its brand image. With an improved brand image, Citibank can increase its customer loyalty by influencing the perception of public relation towards the firm positively.

Implications and Limitations

The study explored the reasons as to why managers should enhance the brand in the improving the image of their organizations, which would help them to gain customer loyalty (Abdullah, Al-Nasser, & Husain, 2000). The study has also expressed numerous details that affect brand image and the performance of the firm.

Moreover, it analyzed the manner in which brand image influences consumer allegiance. Managers should enhance their brand images for the PR practices to achieve their intended goals (Homburg, & Giering, 2001). This will have a positive ripple effect to the firm.

The research had some limitations when. It was limited to customers of Citibank in its branches in New York. This is because of the limited time for conducting research. The research was also limited to the financial industry. Further studies should be carried out based on this in order to prove the hypothesis further (Abdullah, Al-Nasser, & Husain, 2000).

Conclusion

The management of Citibank has a big role to play in ensuring that they develop customer loyalty towards their brand. The management should ensure that it influences public relations perception towards their products.

This would make customers develop a favorable perception towards the company brand. This would also increase customer loyalty towards the brand, a fact that will help the organization increase its market share in this industry.

References

Aaker, J.L. (1997). Dimensions of brand personality. Journal of Marketing Research, 34(3), 347-57.

Abdullah, M., Al-Nasser, A.D., & Husain, N. (2000). Evaluating functional relationship between image, customer satisfaction, and customer loyalty using general maximum. Total Quality Management, 11(4), 826-9.

Anderson, J.C., & Gerbing, D. W. (2002). Structural equation modeling in practice: a review and recommenced two-step approach. Psychological Bulletin, 103(3), 411-23.

Belk, R. (2008). Possessions and the extended self. Journal of Consumer Research, 15(1), 139-68.

Brown, T.J., & Dacin, P.A. (1997). The company and the product: corporate associations and consumer product responses. Journal of Marketing, 61(1), 68-84.

Bruning, S.D., (2002). Relationship building as a retention strategy: linking relationship attitudes and satisfaction evaluations to behavioral outcomes. Public Relations Review, 28(1), 39-48.

Chaudhuri, A., & Holbrook, M.B. (2001). The chain of effects from brand trust and brand affect to brand performance the role of brand loyalty, Journal of Marketing, 65(2), 81-93.

Chiou, J.S., & Droge, C. (2006). Service quality, trust, specific asset investment, and expertise: Direct and indirect effects in a satisfaction-loyalty framework. Journal of the Academy of Marketing science, 34(4), 613-27.

Clark, C.E. (2000). Differences between public relations and corporate social responsibility: an analysis. Public Relations Review, 26(3), 363-80.

Devellis, R.F. (2001). Scale Development: Theories and Application. Newbury Park, CA. Sage.

Dick, A.S., & Basu, K. (2006). Customer loyalty: toward an integrated conceptual framework. Journal of the Academy of Marketing Science, 22(2), 99-113.

Dutton, J.E., Dukerich, H.M., & Harquailn, C.V. (2004). Organizational images and member identification. Administrative Science Quarterly, 39(2), 239-63.

Ekinci, Y., & Riley, M. (2003). An investigation of self-concept: actual and ideal self-congruence compared in the contest of service evaluation. Journal of Retailing and Consumer Services, 10(4), 201-14.

Ellen, P.S., Mohr, L.A., & Webb, D.J. (2000). Charitable programs and the retailer: do they mix? Journal of Retailing, 76(3), 393-406.

Fredericks, J.O., Hurd, R.R., & Salter, J.M. (2001). Connecting customer loyalty to financial results. Marketing Management, 10(1), 26-32.

Garbarino, E. & Johnson, M.S. (1999). The difference roles of satisfaction, trust, and commitment in customer relationships. Journal of Marketing, 63(2), 70-87.

Homburg, C., & Giering, A. (2001). Personal characteristics as moderators of the relationship between customer satisfaction and loyalty-an empirical analysis. Psychology & Marketing, 18(1), 43-66.

Hsieh, A. & Li, C. (2008). The moderating effect of brand image on public relations perception and customer loyalty. Marketing Intelligence & Planning, 26(1), 26-42.

It is possible to determine a lot of factors which can influence the successfulness of the retailer within the market. However, one of the most important factors is the customer loyalty. The market develops according to the principles of the competition. That is why to success in the field of retailing, it is necessary to not only provide the effective services of the highest quality but also concentrate on attracting the customers.

In this case, the notion of the customer loyalty can be discussed as the influential aspect of the further retailer’s development without paying much to acquiring new customers.

The rapid development of the principles of retailing and the active usage of the innovative technologies and the Internet resulted in the fact that today it is possible to use the notion of the customer loyalty which became typical for the progress of usual markets for determining the peculiarities of e-commerce.

E-commerce develops according to its specific principles, and it is significant to pay attention to emphasizing the ways which can contribute to the increase of e-loyalty.

The customer loyalty can be discussed as the constant purchase behavior of those customers who prefer to choose this or that brand and make the regular purchases. The importance of the customer loyalty can be explained with references to the profits which retailers gain while attracting the loyal customers and supporting them in order to reduce their further costs spent on acquiring new customers.

The modern market is competitive, and it is important to save the advertising costs and have a lot of loyal customers in order to orient on them in providing the products and services of the high quality. Thus, the main task of the retailers while preserving their profits is to contribute to the customer’s favorable attitude toward their products (Turban et al., 2010).

It is important that the customer loyalty is based on the customer’s trust and knowledge about the company and retailer, and on the fact of the products’ meeting the customer’s requests and needs.

Some decades ago these principles worked only in relation to the usual market, and today it is possible to use them also for addressing the issues of e-loyalty. However, it is more effective to determine the specific aspects which can be considered as influential for the increase of e-loyalty.

E-commerce has many advantages in relation to the question of e-loyalty in comparison with the development of the usual market. Thus, e-loyalty is associated with such aspects as the low cost structure, the high level of flexibility, the customer’s opportunity to access the extensive product lines, and the low transaction costs.

There are several ways of increasing e-loyalty which are the promotion of the website security, the focus on the contact interactivity, the support of the website reputation, and the contribution to the growth of the customer’s trust (Turban et al., 2010). Moreover, it is also useful to provide the customer with the wide choice in order to satisfy his demands and also to pay attention to the convenience of the site.

The customer loyalty is the necessary factor of the growth of the retailer within the market. The expansion of the modern tendencies and the progress of e-commerce resulted in the development of the notion of e-loyalty which is based not only on the general principles but also meets the issues of e-commerce.

Reference

Turban, E., King, D., Lee, J., Liang, T., & Turban, D. (2010). Electronic commerce: A managerial perspective. USA: Prentice Hall.

Findings

The data collected using questionnaires stipulated a 99% confidence in the involvement of the participant on online purchasing of clothes and apparels in China. A remarkable outcome indicates that all the interviewees browsed these products online (n=200). In fact, it has been proven that such online browsing on apparels and clothes happen more often during the month.

Responses indicated that more than 50% of the respondents had browsed the internet in search of clothes for at least two times. Only a percentage of lower than 30% had browsed one or less times. In addition, the research found that the frequency of browsing was associated to free-time. Eighty percent of the participant supported the attribute that browsing took place while relaxing at home.

Although lower percentages were recorded when handling other activities such as taking meals and working, the most imperative and outstanding record was during relaxation. It was during such times as while sleeping and after meals which recorded the next count of above 25% each. The correlation between the browsing and purchasing of the Chinese clothes and apparels is somewhat independent.

The purchase of clothes on monthly periods was analyzed as follows.

Figure 1: Proportions of purchasing women’s apparels online in China

The marketing and access of the clothes and apparel is affected by such sites as Weibo, which is a blogging service connecting to Facebook and Twitter. This micro-blogging is followed by companies and sites specializing in fashion delivery by Mogujie. These were the most prevalent sites handling the delivery and marketing of the subject items taking over 30% preference.

The deviation of using apps from mobile devices was low. The respondent maintained mixed interests and equal preference for using computers of mobile apps. In this regard, the record shows that there was about 20% preference and application of mobile devices and their components in browsing or purchasing these products.

Among the issues appearing to cause variations in the purchase of clothing and apparel by online platforms included the price, discount, sales volume, size, styles and designs, user recommendations, product authenticity, changes on the actual order on delivery, delivery tactics, and maintenance of reputation, customer services, policies and requirements of the online stores (Dye 2000).

The respondents (n=200) show that the sales’ volumes are the most relevant aspects attracting attention from Chinese clients (π=10.17, σ= 1.11).

Table 1: The mean and standard deviation on concerns of purchasing women’s clothing and apparels in China

However, the data shows that there are sufficient grounds showing that all the other aspects affect the way customers make choices and preferences. For instance, it is significantly apparent that the ambiance of online store can raise as much concerns as the sales volume since the value upon deviations sums to 11.32 (π=9.71, σ= 1.61). The significance of the remaining concerns can be argued or determined from the table above.

The purchase of women’s clothing and apparels is triggered by such factors as prices, conveniences of delivery and order, time management and freedom, personalized and accessible products, recommendations and fashion updates, direct purchase from abroad and impacts from advertisements (Indelicato 2013).

The data collected from these fundamental motives assesses whether some factors are more reliable than others on facilitating online purchase of apparels and clothes. The predominant impact is attributes to recommendation from family, friends, and colleagues among others at a personal level. This impact was signified by a mean of 5.97 and a standard deviation of 1.33.

Table 2: The mean and standard deviation on motives of purchasing women’s clothing and apparels in China

The core processes on value have been argued by researchers to include price, quality and timing. They are the most vital factors enhancing customer satisfaction. These attributes are accompanied by efficiency and effectiveness. The online purchase of women’s clothing and apparel realizes products of the highest possible quality at regulated prices and appropriate time in order to satisfy the customers.

Similarly, the distribution and supply of these products need to be ensured in order to elevate customer value. The quality and cost of these products should be regulated to attain high profits due to huge sales. These changes can be implemented by increasing the quantity of apparel and clothing production and taking advantage of the economies of scale.

Furthermore, some core ideologies and needs must be met to reach the main area of innovation lying within the designs of apparel and their quality. The online stores release new clothes with such advantages developed by innovation as flexibility and durability. They appear to be the fashion as online customers have accessible futures to customize their searches in accordance to the prevailing prices.

The data shows coherence in the variation of motives directing purchases of women clothing and apparel. First, it is apparent that 33 respondents were not deviated by the cost of these products rating such motives as 1 in a scale of 9. However, the mixture of this decision has been opened more closely by the deviation of 0.97.

The application online strategies during purchases depicted relevant results prior to the fashion credibility, direct accessibility and impacts from adverts. DeSemir (2010) postulated that the media accords varying attention and coverage to different products depending on their interests, financial benefits, specialization, and knowledge and skills of the marketer, publishers, or media houses.

Kiraithe (2012) further established that since most marketers are owned by business entrepreneurs in different capacities such as companies, partnerships, sole proprietorships and only a small percentage as parastatal organizations, profits drives most of the operations and contents advertised (Lappe 2013).

In order to test whether DeSemir (2010) and Kiraithe (2012) postulations were inherent in the context of China’s online platforms, a score rating ranging between 1 and10 was used on various items. In this regard, a mean score below 5.0 implied that respondents generally disagreed, a score of 5.0 respondents were ambivalent, and a mean score above 5.0 meant that respondents agreed to the proposed statements.

In the table, the results obtained when the respondents were asked to rate extent that they agreed with the statements: when choosing which contents to air, they focused on those that are income generating, educative, and attract audience tastes and preferences.

Table 3: Media coverage on product pages

Based on the results outputs in the table above, it is clear that the mean score of delivery time scales and charges is 4.18. The data of the return and exchange policies depicted a mean score of 4.20 that does not show any agreement or disagreement. Multiple images of products attracted a mean score of 6.54. Multiple images of products are the major consideration among different media houses in China when determining which content to post.

If many audiences are not affective on space science and technology programs, then media sites will prefer different contents. Conversely, if media can promote information technology programs among different audiences and win their confidence, their tastes and preferences would shift in favor of site-related contents (Jonas 2010). Another consideration amounting to content-airing disparity among different advertisements in China is profits.

Although businesses exist to make profit, online purchases should strike a balance and give back to the society by promoting education programs.

Table 4: The mean and standard deviation on the information required on websites

This research dictates that online transaction involving the women’s clothing and apparel is more direct to dresses and tops more than 50% of the participants subscribed to the purchase of these two products. The dresses and tops attained preferences for online purchases from 114 and 111 participants respectively.

Table 5: Frequencies on the types of clothes and apparels required

Furthermore, the purchase of these women’s clothing and apparels is associated to the fashion and its originality. Out of 200 respondents, 119 informed that fashion brand was their core need while making online purchases in China.

However, other factors such as domestic famous, international famous, and luxury brands among others took a descending significance in this order.

Table 6: The frequencies on brands of clothing and apparels purchased online

In fact, such brands are bought depending on how they have been simplistic to the purchasers. Data indicates that a tally of 132 respondents bid to the idea of purchasing simple clothing and apparels. The highest population of preferences lays on the simple and casual styles of clothing and apparel.

In perspective, a half or even more respondents chose to purchase these products over the internet than others like girly, sexy, elegant, and sweet among other styles. The margin between the two primary styles dominating online purchases and preferences is big while compared to other aspects.

As presented in the literature, trust and loyalty-building over virtual platforms is a technical factor in today’s market. In this regard, clients tend to purchase clothes and apparels from websites that have renowned credibility and reputation. This aspect explains why such websites endorsed and registered by the international trades’ affairs like Taobao rises to be the ultimate preference eventually.

In fact, the data dictates this point without further analysis. The respondent who use Taobao website to purchase women’s clothing and apparel were 136. The other website approaching Taobao was Tmall with 38 preferences out of the same population size of 200. Trust is a fundamental and exceptional attribute when disposing electronic money to sources you may find hard to follow (Earley & Mosakowski 2004).

Table 7: The frequency of customer purchases by various websites

In essence, the question number 15 on the questionnaires proves that credibility is an unexceptional and prudent choice when selecting websites. When websites’ credibility was mixed with such other aspects as promotions, quality of products, diversity and prices among others, it attained a mean of 4.19.

However, promotions also ruled the choices taken by the clients where such programs of issuing gift cards, coupons and discount attained an overall mean of 5.96 at a standard deviation of 1.45. Trust can be affected by variations of privacy management, client taste, and reputation, economies of scale, quality of products, ease of website control, customer satisfaction and reliable third party certification.

The respondents indicated that website control and navigation was the exceptional factor dominating customer trust in online purchase of women’s clothing and apparels. In this regard, the analysis showed that a mean of 7.023 was reached. In a scale of 5, the research found convincing reasons to support the idea that personal touch between sellers and clients was an imperative attribute when purchasing these products in China.

On this factor, the lowest mean was noted to be 3.15 while the highest was 4.35 at a standard deviation of 1.11 and 0.32 respectively. Finally, the demographics show that that the research was centered on young people female between the age of 19 and 39. About 88% of the participants were females whereas approximately 12% were male. From this sample population, 79.41% were between the age of 19 and 29 while 14.22% were at the age of 30 to 39.

In regard to this age, most participants were pursuing courses at different institutions of higher learning like colleges and universities. The finding indicates that 90% of the respondents possessed or were pursuing such courses as diplomas, and bachelor and masters degrees. Furthermore, the largest populations of respondents at 43.14% were students whereas 26.96% were company or enterprise employees.

The sample population composed of the Chinese citizens with relatively comparative monthly income. About 36% of the respondents had a monthly income of lower than RMB 2000 with a mean of RMB 700 and a standard deviation of RMB 200.

Discussion

Economic Fluctuations and Business Development

The determination of customer behaviors was conducted by assessing their responses in regard to purchasing women’s clothing and apparel online in China. The survey has led to various fundamental arguments in this research. First, the purchase of women’s clothing and apparels is dependent on various economic factors entailing development of education, internet penetration and income attainment from the people.

In China, some of the variables found to cause significant impact at the market-product level in making decision include inflation, interest rates, unemployment, consumer confidence, gross domestic product, discretionary income, and rate of currency exchange. Interest rates have a particular importance to companies pursuing growth opportunities since the expense of direct money borrowing affects a company’s ability to expand.

Other economic factors associated to technological development affect the ability of a consumer to afford clothing and apparel sold via internet, which make economic stability a major determinant of the industrial growth. This factor is supported by such attributes as lack of sufficient competition in the online markets.

For instance, it is evident that Taobao has been dominating the online sales of clothes and apparels in China. This factor may allow a business to attain the power of determining the market prices by exploiting various opportunities in the country.

Online Social Influence

Social factors classify customer’s features into two essential classes namely culture and demographics, which present a major concern (Finch 2012). Culture contains the societal beliefs, attitude, and values whereas the study of population (demographics) gives a statistical description of the community’s characteristics expressed by location, age and employment. The interaction between marketing and culture is reciprocal.

Therefore, the marketing communications utilize cultural meanings by transferring them to their products in order to attract customers who hold these values (Ebrahim, Ahmed & Taha 2009). This aspect explains why the purchase of clothes and apparels is centered in design, style and fashion. It elaborates about such set of apparels and clothes as dresses that Chinese purchase.

Probably, other areas or countries with distinct designs set to obey some rules, norms, or practices may prefer different styles. It proves that the culture and behaviors of the Chinese allow simple and casual styles of the original brands as dictated by 66% and 54% of the respondents respectively. This evaluation shows that marketers may take the opportunity to market their products during cultural holidays depending on the actual income.

Demographics

Demographic characteristics of the market allow sellers to understand how the different segments of the community respond to product marketing as a result of such personal characteristics as age, sex and income. In China, the assessment of consumer’s attitude enables a person to distinguish how the different demographic segments perceive certain varieties in regard to online sales of the women’s clothing and apparels.

It is a guideline showing the products to design for specific groups based on their preference, which can lead to acceleration of the company’s growth within five years. In this case, the major target market would be women who can assess the internet and purchase online items.

This investigation shows that the young and educated population can accept the idea of purchasing these products online. All marketing managers must be conscious of the trends since technological factors affect market processes by creating innovative systems. These systems enable interactions with customers, processing of orders, and distribution of products.

Market Liberalization

It may be vital to liberalize online markets in order to allow competition. These are market-related and occur as an effect of liberalization which has globalized national markets increasing the threat of new entrants or competition in traditional. Furthermore, the increase in the behavior patterns of the consumer demands single products which may not be rewarding.

Low exposure may signify poor marketing strategies, which can derail the growth of a company especially within the initial five years. In a bid to straighten these behaviors, the sellers can maintain their stability and predictability if they are known to produce quality and fashionable apparels that enhance brand recognition and promote consumer loyalty.

Establishing a global presence will greatly increase the company’s chances of success as well as ensure the growth of sales within five years due to the establishment of a wide market in the different countries (Gibson & Cohen 2003). Some opportunities can be capitalized to enhance a company’s growth by creating a history of apparel’s innovation and ensuring that the trend proceeds. With the invention of new clothes and apparel, it can be designed to meet the various tastes and cultures of people across the globe.

Influences of Culture

It is essential to inform people about the development of such fundamental internet-based programs that consolidated and network people with diverse knowledge, skills, experiences and cultures. In this manner, the research shows that knowledge is being shared among people with distinct and diverse culture throughout the globe.

However, even though information about the functionality of the virtual sales has been developed by websites and other research works, the current study discussed the particulate strategies of their development and management in China. It lays down the skills and processes encountered to enlighten the readers on how these sales can be formed and made to work.

In this light, the article research findings inform the reader and occupy the existing gap in knowledge by creating published and reliable information. Furthermore, the benefits that these sales bring to international organizations have been presented to assist the reader (Gorog 2011). There is an existing gap in knowledge on the development and management of virtual sales in China.

This aspect implies that the information can be developed and presented to the people. In this light, this research evaluates various factors encountered while developing and managing virtual sales of women’s clothes and apparels in China. It will outline the problems, reason, benefits, and achievements among other factors involved in developing and managing the online sales of the women’s clothing and apparels in China.

Online Sales

The management of virtual sales may depict various fundamental challenges. The researchers depict the need and effectiveness of virtual sales of women’s clothing and apparels in China. They are identified as prevailing businesses effective in reaching the final outcomes of the researchers.

In China, the developments of the virtual sales are improving continuously as the information technology proceeds to attain integration as presented by the data showing active participation from the respondent from all over the country. The use of internet in reaching the target clients depict the impending quorum required. Presently, the sales have managed to penetrate and unite many people.

The virtual sales of women’s clothing and apparels have allowed globalization to take place easily. In fact, such social companies do not only make huge profits due to the prevalence of members and common interests, but also creates global civilization and understanding of cultural differences. Such interactions are similar to the application of virtual sales in handling issues throughout China.

They bring the human resources at one point where they may be accessed and exploited by firms or business easily. Since the virtual sales are significantly reliant on the prevailing fast communication tactics, it implies that the future of virtual sales works under the assumption that the revolution of IT does not change drastically.

Furthermore, there many literals works developed to evaluate the management and development of the virtual sales. The lack of information on the management and development of the virtual sales have been complemented by the assessment of literature associated to the problems, reasons, benefits, and achievements of the virtual sales across the globe (Jung 2013).

The relationship between these assumptions and the problem statements is that the sampled resources display the overall argument of other researchers and therefore informs the people interested in a similar way. The reviews have revealed fundamental and helpful information that can fill the gap in knowledge.

They identify that the need for appropriate and strategic management to implement virtual sales of women’s clothing and apparels in China (Slack et al. 2012). They show that the reviews can offer reliable solutions to the problem if many research works from reliable sources are used. In this light, future research may undertake similar assessment of literature in order to inform people about such issues of the virtual sales.

The information can allow the sales to expand depending on their demand and popularity. The threat that managers instill on other members and the networks that they purports is an indication of their influential role in the sale. The conflict impacts various processes in the organization of events.

The sales will devolve such tactical approaches as cultural intelligence, which is the capability to associate and work efficiently when dealing with different cultures (Earley & Mosakowski 2004). On the other hand, there will be the improvement of the individual’s ability to interact with others. These two concepts present an essential tool of relating with the target customers and presenting the specialty of the subject products.

Advertisements may not suit all people across different cultural and ethnic backgrounds (Vinaja 2010). In this respect, even the largest companies may present advertisements that do not align with some people. These blunders may cause customer dissatisfaction, loss of loyalty, and losses from complaints and court cases. In this light, the performance of the S-curve is affected depending on the strength of blunder, which discourages the customers from purchasing the products.

It is essential to know the culture of the people where the target market is located in order to prevent cultural blunders. In this way, adverts can be related to such cultural norms where all cultural considerations are accounted. The components making the sales should be selected depending on their reliability and trust bestowed on them by the customer.

It implies that the members are vital ‘ingredients’ trusted by the client, which means that the final product is high quality. It is important because it assists customers in boosting their trust on new services. They add value to the subject sale satisfying the clients’ conscience and motivating them into buying the subject product. My concept offers the use of accessories from reputable firms in order to attract the customers who trust these firms.

In another point, Customer Life Time Value (CLTV) is a concept applied by businesses to determine profitable outcomes of the relationship with a customer over a period of time to the future. The CLTV takes a specified amount of time and do not consider the life time of a client. Furthermore, it is a probabilistic concept based on the intentions of the customer which may change depending on personal variations.

This concept is vital since it allows a business create valid proceedings in respect to profit making. In fact, it allows businesses to determine the most appropriate cost to be set aside for marketing. Essentially, the effects of such aspects as marketing may follow an unprecedented trend (Skyrik 2010).

However, it is argued that CLTV follows the S-curve where there is a gradual increment in the profits which increase dramatically and stabilizes. Finally, a business must lay down all the possible outcomes to provide conviction on the process. It must be convinced that there is a very high probability of succeeding.

Delivery Services and Their Influences

The demand for delivery services and product sales has been influenced significantly by the rising competition and new strategies for reaching people throughout China. In this regard, information technology has modified the ways of reaching people by social sites and other internet advertisement techniques. For instance, such strategies may lead to high demand for clothes as compared to the target trends.

If one apparel type has preceded other brands on the market from different companies, its sales are expected to increase together with the subsequent wholesale purchase from the manufacturers. The approach dictates that deliveries of the apparel are higher than the competing brand. In this light, the apparel has been modified to fit the needs of customers and develop the chances of preference basing on its fashion and quality level.

Furthermore, the prices of the women’s clothing or apparel are considered significantly to align with the current competition. In some instances, the business avails apparels in accordance with the clients’ specifications making it a rare company due to the flexibility. In a bid to accommodate these changes, a company can introduce various strategies which include reducing the prices of the clothes and apparels.

It is making varieties of clothes and apparels with distinct specifications in order to segment the market. In addition, it can establish a new marketing strategy through the introduction of websites and the use of social media to advertize the new fashions. For instance, a website can be formed to advertise the apparels in China further and ensure that there are billboards in populated areas.

Companies promote their sales by publishing awards and discounts to its customers. This aspect allows a company to be competitive against the other competing ones in the market by meeting the demands and expectations of their clients. However, a full exploitation of the marketing strategies can also incorporate networking as a way of advertising. Moreover, they can promote the sales of the brands by adding other artifacts as discount to the customer.

This research demonstrates that the approach of applying the delivery methods to compete with other companies across the globe has significant effects. The data shows that there were high means on preferences regarding the delivery of women’s clothing and apparels. The questions 10 and 15 approve this postulation by showing that delivery had the second highest means of 4.18 and 4.82 with a standard deviation of 0.96 and 1.07 respectively.

Delivery affects the clients and consumers through advertisements, availability of information and ease of product/services’ accessibility. In this regard, it is apparent that the sales made and delivered through reputable firms have profound competitiveness than the other relying on less reliable companies for delivery.

The research shows that, even though, the products may have qualified, their sales can subsidize since the customers are not willing to receive shipping or delivery from the company the business suggests. The sale of products from is based on reputation, delivery methods available and quality. Primarily, a customer is served by an employee or website who/which provides the menu and enquires when he or she needs a service or product.

This inquiry is done ardently and immediately after a customer has shown interest. The employee should receive training in order to manage the deliveries appropriately. The training of the employees involves instilling skills on approaching, serving, and talking to the customers or clients during the sale. These skills enlighten the employees about handling the customers when using the internet as well as during the delivery of their products.

In this manner, they can retain professionalism and adhere to the social boundaries present (Levin 2013). A company can implement a formal or informal training program depending of the complexity of skills required. The informal training program may occur without teaching intentions since there are no learning objectives.

The formal training of employees has standard goal and objectives to direct the intended learning of trainees and assess the resultant outputs of the teaching sessions. Realistically, the literature review demonstrates that training through the formal standards is more efficient than the informal way of delivering information to the students.

Limitations

This research study has several fundamental complications that limit its generalization. First, the finding can only be centralized in China since every region may have distinct behaviors. Secondly, the questions used in the questionnaires cannot provide scale data to quantify the usage of internet to purchase the products.

It is also apparent that data regarding how often the people of China purchase clothing and apparels online was limited to the options provided. However, other research studies can be conducted to supplement this investigation.

Conclusion

The analysis of the research data paved way for making critical conclusions on the delivering strategy adopted for the women’s clothing and apparels in China. In this quest, the research involved in making the necessary amendments to the current version of production, distribution, timing, marketing and pricing of the product (Mir 2014)

. In addition, the information was helpful in the procurement departments, human resource, production inventory control and other departments actively involved in the production and distribution. Planning of the specific strategies and procedures to follow is critical in organizing the flow of activities from production until the clothes and apparels reach the customers (Nzuve & Rebecca 2014).

One of the most important advantages of purchasing women’s apparels and clothing online in China was the provision of an opportunity to book products electronically. In essence, the online purchases are very crucial in the client service systems. They are meant to offer an opportunity and platform to inquire and consult about faults, complications and make follow-ups.

This implies that they should be set in manner that the clients can access the client service services more efficiently and fast. In that regard, other purchases demanded the clients to avail themselves physically to the sellers in order to secure a product. However, this system of physical purchase makes it difficult and slows for the clients to access the products.

At times, it is very involving and tedious because the clients are required to visit the premises for a number of times before they see the right apparel or cloth. In a deeper perspective, visiting sale’s premises is even unnecessary considering that the client is just seeking the delivery of the right product. Indeed, the online purchase does not incorporate the actual rectification process.

As such, it is out of order for the client to waste the cost and time for transportation. With the introduction of the Chinese online market, the client service system introduced a provision where the clients can secure products by online communication (Mantas & Hasman 2013). This factor simplified the engagement and involvement of the clients in the process of purchase.

It also eliminates unnecessary congestion in the client service space bearing in mind that the number of people is reduced. As such, this is an important deliverable provided by the online platforms in China. In the client service system, the management of data is one of the most crucial undertakings. In this regard, professionals are required to collect, record, and store information with dignity, credibility and reliability (Hewitt 2012).

As mentioned before, a slight error in the records of a client can lead to a devastating eventuality. In that regard, there is no room for errors because they may lead to a mistake with irreversible effects in the short term and long-run. It is, therefore, important to ensure that the clients’ data is well-managed to prevent unfavourable events such as loss or manipulation.

Indeed, manipulation of data is an integrity issue that might equally complicate the welfare of a client. As such, the credibility of online sellers was conjured with the idea of maintaining the standards of data management in mind. It was made to ensure that the records are straight, accurate, and reliable in the process handling the clients (Kishor 2010).

In essence, prescription is at the heart of the client service system since it is a critical undertaking where the clients are directed on handling issues. In that regard, it becomes a sensitive venture since it is the end point of an entire diagnosis bearing in mind that the rest of the assessments are done to determine the type of resolutions given to the client and instructions provided.

In the 21^st century, it was very important to change the orientation of the online service and other sectors of marketing towards the use of technology. As such, the client service system viewed as the foundation and the basis of using technology in the system. In this regard, online marketing and selling of women’s clothing and apparel in China has been a crucial platform and starting point of anchoring the entire IT integration.

As such, a basis of developing the technological use in the client service system was an important deliverable because that it was used as an evaluation aspect. Fundamentally, it is obvious that the most critical test of online businesses is to pull in clients who have been appended to other greater organizations.

References

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Introduction and Background of Research

It is a primary goal of any company to develop customer’s loyalty and this has been achieved through loyalty programmes for customers. These programmes encourage the customers to purchase products offered repeatedly since they are rewarded (Saxena, 2009). There are different loyalty card programs depending on the type of service offered by an organisation. Local cards are used as a tool in developing sales promotion (Lee, 2002).

For example, in a supermarket, customers with loyal cards activate them by swapping them in special sensors that are located by the entrance (Mauri, 2003). Consequently, a customer can be in a position to locate all the products that have promotional offers.

The advantage of loyal cards that are computerized enables displays of promotional offers that are specific to each individual customer’s shopping profile with respect to the product as well as the brand. In case there is a customer who is interested in any of the offers, then the right promotion coupons are given (Lancastand Massingham, 2010).

Information Technology and Loyalty Programs

Technology is largely depended on in loyalty programmes and its contributions include the following;

• The point of sale (POS) systems that help in the recording of actual transactions
• Software programs that help in analyzing varying customer transactions which are useful in coming up with promotions (Egan, 2007).

In the modern retail and service industry, demand for customers is increasing rapidly and marketing is also very competitive. As such, loyal cards can be used to attract customers by giving them a reward or discount and in return more products are purchased than if there was no motivation (Wilmshurst, 2011). This research is geared towards establishing the benefits of loyalty cards to a retailer. In order to do so, the nature of the research to be conducted will seek to answer the following questions;

Research Questions

1. What is the customer’s buying pattern?

2. What are the advantages of loyalty cards to the customers?

3. What are the customers’ needs and their different preferences?

4. What does all these questions (1, 2, 3) beneficial to the retailer?

Aims and Objectives

General Objective

• The overall objective of this research is to establish the benefits of establishing a loyalty card scheme.

Specific Objectives

• To find out the purchasing pattern of different customers.
• To find out the benefits derived from a loyalty card scheme.
• To provide viable recommendations to the retailer on loyalty cards.

Hypothesis

• There is no purchasing pattern for different consumers.
• There are no benefits that are derived from a loyalty card scheme.

Proposed Research Methods

Qualitative Research

Surveys are mainly used to carry out marketing research (Blythe 2006). However, there exist many limitations such that many researchers use quantitative techniques which should not be the case. In order to adequately achieve the stated objectives, qualitative research will be used. This will involve the use of unstructured questionnaires, interviews, and use of focus groups. This choice is informed by the fact that objectives do not require to be quantified.

Data Collection

Data will be collected from primary sources as well as secondary sources. The secondary sources will include books, magazines, journals, internet among others. The primary sources include interviews, questionnaires and focus groups discussions.

Unstructured Questionnaires

Both open and closed questionnaires will be used. The respondents will therefore be in a position to give their different opinions in the open questionnaires and the closed questionnaires will help the researcher to analyze quickly and also avoid ambiguity.

Interviews

The respondents will be asked open ended questions and they will be encouraged to express themselves freely by giving their own ideas. However, the researcher will be keen so as not to ask questions that are biased.

Focus Groups

Those customers that will show an interest on the subject matter will be grouped and expected to constructively and exhaustively contribute. A focus group is advantageous since it enhances a wide range of ideas from the members (Fernie, 2003).

The sampling Design Process

The target population will be the loyal customers and those in major retail outlets. The process will be precise in order to give the required results. The sampling frame will then be determined and it will constitute the sample frame which will be a representative of the target population.

The sample size will be 60 people in which 30 females and 30 male are targeted. Judgemental sampling will be used since it is a non-probability technique in sampling. It is predicted that about 95%-99% of the 60 respondents will be reached (Malhotra, Hall and Shaw, 2004).

Data Presentation and Analysis

Data will be presented and analysed by use of descriptive statistics, inferential statistics as well as associative statistics. Descriptive statistics involves summarising of data into a way that it can easily be interpreted and analysed (Lancaster and Massingham 2010). It involves the use of such tools as averages, standard deviation, frequency, maximum, minimum and percentages in distribution (Ray, 2010).

On the other hand, inferential statistics includes use of hypotheses in order to infer the true characteristic of the population (Roddy, 2010). This is basically based on the data acquired from the sample size. Associative analysis tries to find out whether the variables in the model do relate and the type of relationship if any (Griseli, 2010).

Examples of these tools include correlation cross tabulation and regression. Graphs will also be used to present data. Graphs give the pictorial presentation of data and therefore ease interpretation and analysis (William and Babin, 2012). They include; charts, pie charts bar graphs, line graphs among others.

Accessibility to the data

This research will work under the assumption that the necessary data will be easily accessed from the respondents since they will be willing to give the needed information. It also assumes that the respondents will not be biased in on the ideas that will be issued.

Time, Resources and budget constraints

The data will be collected in two months. The resources that will be used in this research is basically the researchers that will aid in collecting information and cash that will be used for transport, accommodation and typing and printing of questionnaires. The tools used to collect data will first be pre-tested in a small population and any mistakes will be corrected by the researcher. A sample size of 60 will be selected due to limited time and resources.

Validity of Data

Data validation is very important and it involves instituting measures that will ensure meaningful information is collected from the respondents for effective research (Bellizzi and Bristol, 2004).

In order to achieve this, all the questionnaires will be reviewed to ensure that they are duly completed to ensure that they will be viable for interviewing. Reviewing ensures that the questionnaires used are accurate, consistent and also avoids ambiguity responses from the respondents. Moreover, the respondents will be expected to be honest and give valid information.

Ethical issues

Loyalty cards require personal information from the respondents which is confidential. Therefore, this research will ensure that no information will be availed to third parties without the consent of the customer.

Secondly, the information will be in databases that will only be accessed by authorised persons and this reduces the risk of information disclosure (Kotler, 2000). The staff members will also be expected to uphold a high degree of ethics by not engaging in a behaviour that will invade the privacy of the customers (Winn, 2006; Clarke, 2006).

Another issue of ethical concern entails a possibility of misuse of the royalty programs to do unfair market that may not be based on full disclosure that would guarantee the freeness of the decision making process. This may result to a rise of a possible way of having putting the organisation’s profit motive beyond ethics.

To ensure that this aspect is not introduced to the retail chain due to its adverse effects of high returns within a short run, but future negative implications, there is a need that the research process will have an established code of ethical conduct during the establishment of the loyalty program as well as during the actualisation of the program. Lastly, persons who will violate the set policies on customers’ privacy will be punished and compensation to the customer whose profile information has been affected will follow.

Potential use of the research findings

After carrying out the research, the results will be used to determine the buying pattern of the customers which will be used by the retailer to establish the type of loyalty cards that will be used in retailing. This is because customers have different purchasing powers and also the purchasing frequency differs.

Some are light, medium and others are heavy users (Coussement, Demouline and Charry, 2011). It will also help in identifying the tastes and preferences of different customers and this information will be used in promotional offers. The information will also be important to other stakeholders in order to determine the financial allocation to different products as given by the customers.

Conclusion

The benefits of loyalty cards to the clients and the stakeholders cannot be overemphasized especially in developing markets. Purchases are increased and therefore the profits are maximized. Consequently, the business expands and the products or services are sold at low prices due to the effect of economics of scale. The retailer is also able to establish the loyal customers and can easily predict the future financial position of the business. The clients are also motivated by rewards and thus enjoy extra satisfaction without payments.

Recommendations

In order to achieve the desired results from this research report, there are some areas that need to be improved. For example, the retailer should establish those customers that have multiple loyalty cards that help them benefit from the reward issued in different markets.

Instead, he should offer those multiple loyal cards for his own gain. Lack of security is a barrier to customers purchasing the loyalty cards and thus a very comprehensive security system should be put in place in order to make sure that the customers’ personal information is not interfered with.

Reference List

Bellizzi, J. A. and Bristol, T. 2004. ‘An assessment of supermarket loyalty cards in one major market in US.’ Journal of Consumer Market. Vol 21 No. 2 Pp 144-154.

Blythe, J. 2006. Principles & Practice of Marketing. Cengage Learning EMEA: New York.

Clarke, C. 2006. Store Cards Market Investigation. The Stationery Office: Oxford.

Coussement, K., Demouline, N. and Charry, K. 2011. Marketing Research With SAS Enterprise Guide. Gower Publishing, Ltd: London.

Egan, J. 2007. Marketing Communications. Cengage Learning EMEA: London.

Fernie, J., Fernie, S., Moore, C. 2003.Principles of Retailing. Routledge: New York.

Griseli, P. and Seppala, N. 2010. Business Ethics. Cengage Learning EMEA: London.

Kotler, P. 2000. Marketing Management. Prentice Hall: London.

Lancaster, G. and Massingham, L. 2010. Essentials of Marketing Management. Taylor & Francis: New York.

Lee, C., W. 2002. ‘Sales promotion as strategic communication: The case of Singapore’ Journal of Product and Brand Management, Vol. 11, No.2, pp. 103-104.

Malhotra, N., Hall, K. & Shaw, M. 2004. Essentials of Marketing Research: An applied orientation. Pearson/Prentice Hall: New South Wales

Mauri, C. 2003, “Card Loyalty: A new emerging issue in grocery retailing”, Journal of Retailing and Consumer Services, Vol. 10, pp 13-25

Ray, R. 2010. Supply Chain Management for Retailing. Tata McGraw-Hill Education: New York.

Roddy, M. 2010. Sales Promotion: How to Create, Implement and Integrate Campaigns That Really Work. Kogan Page Publishers: New York.

Saxena, T. 2009. Marketing Management. 4 Ed. Tata McGraw-Hill Education: New Delhi.

William, G., Z. and Babin, J., B. and Griffin, M. 2012. Research Methods (with Qualtrics Printed Access Card). Cengage Learning: New York.

Wilmshurst, J. and Mackay, A. 2011.The Fundamentals and Practice of Marketing. Routledge: New York.

Winn, J., K. 2006. Consumer Protection in the Age of the Information. Ashgate Publishing: New York.

Introduction

Brand image can be termed as evaluating the beliefs and the perception of the customers with regard to a specific product, a service, or a company (Kahle & Kim 2006, p. 4). The theory has become one of the most accepted forms of marketing, as it involves satisfying the customers with their psychological need.

This theory has been adopted and accepted by many marketers as it facilitates benchmarking of brand value during marketing (Kerin, Hartley, & Rudelius 2009, p. 132). This idea is drawn from the fact that providing customers with psychological benefits creates room for loyalty, and thus increases the rate of customer turnover through repeat business. However, what effect does brand image benefits have on the customer satisfaction and loyalty?

Justification of the Question

The above question is crucial since it will help the researcher to utilise the academic knowledge drawn from diverse academic literatures on brand image benefits in relation to a telecommunication firm, and in this case, the Vodafone Egypt.

Thus, the researcher will be in a position of criticising the academic literature on brand image, with a focus on the role of customer satisfaction and loyalty in the in the industry. More so, the researcher will be in a position of Coming up with a up with a theoretical framework, which will help to assess the brand image benefits with regard to customer satisfaction as well as loyalty, and more so, establish the extent to which they are correlated.

Relation to Previous Research

Traditionally, brand image has been used as a tool of differentiating a product, service, or companies, as many people believe that it creates room for identity that customers seek while buying a product or a service from a given company (Romaniuk & Sharp 2004). A number of marketing research studies affirm that brand image benefit has a positive correlation with loyalty, which helps the customers repurchase the goods or services (Brooks 2010, p. 67).

In this regard, the brand benefit entails portraying high levels of relationships, showing confidence, as well as providing special treatments to customers.

This theory emphasizes on creating a good customer-company relationship, as this creates an avenue for loyalty. However, other studies have affirmed otherwise, citing no relationship between quality service provision and loyalty (Brooks 2010, p. 158). This aspect of contradictory inference brings forth one prime question: do benefits of brand image have a correlation with consumer loyalty?

Dubrovski (2001) rebuffs the idea of measuring brand image by considering attribute measurement as the only viable instrument. Dubrovski affirms that other practical measurement tools must be included in the process, such as value and benefit that comes with buying the good or service; thus, the author forms a current theory in market research.

Dubrovski’s assertion has contributed widely in establishing the rationale behind of assessing customer satisfaction with regard to brand image. Authenticating this assertion will lead is to one prime question: is there a positive correlation between customer satisfaction and brand image benefit?

Another theory conceptualizes that customers become loyal to a particular firm because of a previous satisfaction they had with the brand (Schmitt & Simonson 1997, p. 67). This is also evidenced by a number of market research, which has continually confirmed that loyalty has a positive correlation with satisfaction of the customers (Brooks 2010, p. 125).

The studies on this issue, however, dwell on recommendation and intentions to draw their inferences, bringing forth one prime question: is there a positive correlation between loyalty and satisfaction of the customers?

Vodafone Egypt is one of the companies that can be used to assess the brand image of a telecommunication service. However, the fact that it is a multinational company makes it challenging on evaluating ways to approach and evaluate the brand image for the company.

While a number of companies use symbolic benefits to draw potential customers to their products, the Vodafone Egypt has been using functional benefits to not only satisfy the customers but also create customer loyalty (Tamer 2012). The methodology in this proposal will consider customers of Vodafone Egypt as the participants.

Proposed Methods

Using experimental design, the study will delve into in-depth empirical research to study the ‘effect of brand image on the loyalty and satisfaction in the context of a telecommunication company’. Experimental design will prove to be of paramount importance in this study because it will help the investigator establish the cause-effect analysis of the variables. The study will make a casual inference of the following questions:

1. Do benefits of brand image have a correlation with consumer loyalty?
2. Is there a positive correlation between customer satisfaction and brand image benefit?
3. Is there a positive correlation between loyalty and satisfaction of the customers?

The study will use both quantitative and qualitative study that will allow a thorough investigation on whether the loyalty and satisfaction play a critical role in determining the brand image of a telecommunication company. To enhance the validity, the study will investigate on the research problem using a wide range of secondary sources (Yin 2006, p.14). More so, investigation will be carried out through the primary sources in an ethnographic study.

The participants will include all customers of telecommunication services across Egypt, who will be selected randomly. This cross-sectional study will provide all answers to the survey questions and interviews at the end of the study. Formulation of questionnaire will be based on the qualitative studies emanating from books and articles that are grounded with theories of brand image, customer value, as well as customer satisfaction, among others.

The instruments of measurement will include diverse scales that will measure social as will as emotional connotation of the customers with regard to telecommunication services. The questions will be phrased in such a way that they will answer the brand image benefit.

A Likert 5-level scale will be used to assess the questionnaire, and this will measure the attitude of the participants with regard to relationship between brand image, loyalty and satisfaction. Customer satisfaction will be measured using ten-scale instrument similar to likert scale. The customer loyalty will also be measured, with a view of assessing the brand image of the company.

To answer the questions of the study, data will be entered in the computer system to measure the brand image benefits, loyalty and satisfaction. SPSS software will be employed to analyse the results of the questionnaire, where the means, standard deviations, percentages, one-way analysis of variance (ANOVA), unpaired t-Test, and Pearson’s correlation coefficient will be calculated to establish relationships (Hardy & Bryman 2004, p. 54).

Reflection

Potential Practical and Empirical Obstacles

Even though the study will attempt to employ a number of secondary sources to come up with comprehensive information regarding the effect of brand image on the customer loyalty and satisfaction, the study will experience a limitation towards accessing some information, because there is little literature covered in the context of telecommunication service in relation to customer satisfaction and loyalty.

More over, even though probability-based sampling of participants will enhance the external validity, the fact that the study is a cross-sectional one limits its chances in as far as assessing the consistency of brand image is concerned. A cross-sectional study may jeopardize the external validity since it does not take a pre and a post evaluation test to establish the short and the long-term effects of the prevailing external factor on brand image of the Vodafone Egypt (Page, Cole, & Timmreck 1995, p. 92)

Conceptual and Theoretical Problems and Difficulties

Even though the researcher will attempt to use books and article grounded on theories of brand image, there are a number of contradicting inferences within the sources, and this calls for a careful selection of the sources.

For case in point, while some theories suggest that customer satisfaction leads to brand loyalty, which, in turn leads to brand image, other studies do not find a correlation between satisfaction and loyalty, demonstrating that they are mutually exclusive. Thus, the conceptual framework will call for a careful selection of variables.

Ethics

Ethical consideration will be critical in this study and will be attained by ensuring that the study gets an approval from the Institutional Review Board or similar ethics review committee, which will ascertain that the study does not infringe on the rights of the participants; thus, there will be no compulsion in recruiting participants.

More so, the researcher will ascertain the point of the participants’ interest in an effort to establish the content validity, which will help to eradicate biased responses from the participants. In this case, content validity will be established by assessing the extent to which the study represents the attitudes of the respondents (Creswell, 2003, p. 183).

My Position as a Researcher in a Political Field

This research study will aim at investigating the effect of brand image on the customer loyalty and satisfaction in a telecommunication context. As a researcher in a political field, I will be in a position of finding answers to a number of complex issues surrounding the brand image of Vodafone Egypt.

Being a multinational company will help me provide more answers as to what extent the company is able to create a positive brand image within the country. Hence, I will be in a position of highlighting the conditions under which the political environment should cooperate with Vodafone Egypt in order to create a brand image benefit.

Conclusion

The results of the study will be regarded as viable because they will be based on probability sapling of a large sample size of customers from all telecommunication services in Egypt.

According to the findings, it is imperative to note that, indeed, functional role of brand image has a positive correlation with satisfaction and this is consistent with some finding in the literature. However, even though the findings will have a great impact on understanding brand image of telecommunication firm, the study will need to be replicated in order to address matters concerning sustainability of brand image in cases where all aspects of brand image, including symbolic and social benefit.

Timetable

• April 6^rd -May 16, 2012 – Fully analysing the past and present literature review pertaining external factors affecting the brand image of Vodafone Egypt
• May 23 –May 30, 2012- Collecting data from participants through interviews, as well as organising it according to their topics/themes, constructs, and theoretical framework.
• June 5^th – June 28, 2012- Further collection of data from a case study of Vodafone Egypt with regard to its brand image.
• July 3^rd – July 27, 2012- Analysing all the data collected from the ethnographic study using diverse statistical methods.
• August 7, 2012- Submitting the entire report of brand image of the Vodafone Egypt

List of References

Brooks, 2010, The power of loyalty: 10 essential steps to build a successful customer loyalty strategy. Irvine, Calif.: Entrepreneur Press.

Creswell, J 2003, Research design: Qualitative, quantitative, and mixed methods approaches (2nd ed.), Sage publications, Thousand Oaks, CA.

Dubrovski, D 2001, The role of customer satisfaction in achieving business excellence. Total Quality Management, vol. 12, 920-925.

Hardy, M & Bryman, A 2004, Handbook of data analysis. Sage Publications, London.

Kahle, L & Kim, C 2006, Creating images and the psychology of marketing communication, Lawrence Erlbaum Associates, Publishers. Mahwah, NJ.

Kerin, R , Hartley, S, & Rudelius, W, 2009, Marketing, McGraw-Hill/Irwin, Boston.

Page, R, Cole, G, & Timmreck, T 1995, Basic epidemiological methods and biostatistics: A practical guidebook, Jones and Bartlett, Boston.

Romaniuk, J & Sharp, B 2004, Conceptualizing and measuring brand salience. Marketing Theory, vol 4 no. 4, 327-342.

Schmitt, B, & Simonson, A 1997, Marketing aesthetics: The strategic management of brands, identity, and image, Free Press, New York.

Tamer, Y 2012, Case Study: Vodafone Egypt. Web.

Yin, R 2006, Case study research: Design and methods, Sage, Thousand Oaks, Calif.

Appendix

Summary of the Ethnography

The interview process will involve collecting data concerning the views of the participants regarding brand image benefit, which include experiential, symbolic benefit, social benefit, functional benefit, as well as the appearance, in relation to customer satisfaction and loyalty. This will entail answering the following question:

Experiential Benefit

• What kind of telecommunication service makes you feel good?
• What kind of telecommunication service would enable you to increase service usage?
• What kind of communication service would induce pleasure to you?

Social benefit

• Does our bran help you feel accepted?
• Does our brand improve the how others perceive you?

Functional Benefit

• Does our brand perform according to its expectation?
• Is our brand reliable for service?

Symbolic Benefit

• Do you look cheap while using our brand?
• Do people think that you have an elegant lifestyle by using or brand?
• Do you normally fit well with other members of the community while using our brand?

Appearance Benefit

• Does our brand provide a solution that is within your expectation?
• Does our brand portray a good impression for the firm?
• Is our brand more effective than other brands across the country?

And in an effort to acquire qualitative information on the external factors affecting the brand image of Vodafone Egypt, the participants will subsequently be asked to support their answers by providing an explicit explanation.

Introduction

Marketing is one of the most important managerial functions in every business. It helps companies to communicate their value propositions to the existing and potential customers. In the contemporary business environment, customer relationship management (CRM) has emerged as one of the most essential marketing roles.

As competition intensifies in most industries, businesses are increasingly finding it difficult to attract and retain new customers. Consequently, the focus has shifted to retaining the existing customers. Loyalty is fundamental in retaining existing customers. Hence, most companies are adopting loyalty programs.

Implementing these programs involves rewarding customers for making repeat purchases or shopping from the same firm. The rewards include prizes, discounts, cash and reward points among others.

Traditionally, loyalty programs were implemented through point-based systems in which customers earned redeemable points for their purchases. However, the emergence of e-commerce has prompted a shift to internet-based loyalty programs.

In this case, companies use their websites to run the programs. The purpose of this paper is to discuss the application of internet-based loyalty programs in the context of the hospitality industry. The components of loyalty programs, as well as, their use in CRM and marketing will be highlighted.

Practical Application

How Loyalty Programs Add Value and Fit into CRM

Empirical studies indicate that the hospitality industry is leading in the use of loyalty programs in the US. This trend is attributed to the intense competition that characterizes the industry. Besides, some segments of the industry such as hotels, normally, depend on seasonal demand. Hence, the need to implement loyalty programs becomes apparent.

In this context, loyalty programs create value in the following ways. To begin with, the programs help in increasing the frequency of purchases. The main objective of loyalty programs is to ensure that customers buy from the same company as frequent as possible.

Customers tend to feel appreciated when they are rewarded for their purchases. Besides, rewards such as discounts have real economic benefits to the customers. Thus, a loyalty program that offers real benefits is likely to increase sales and revenue. For instance, fast-food restaurants often reward their frequent patrons with free meals in order to ensure loyalty and high sales.

Loyalty programs play a fundamental role in building a comprehensive database that contains accurate and relevant information about purchasing behavior. The programs capture important information such as the type of products that are frequently purchased, the expenditure patterns, and the seasonality of purchases.

This information is fundamental in executing marketing functions such as market segmentation, product development and running promotional activities. In the hospitality industry, loyalty can only be achieved if the customers’ preferences, as reflected in their purchasing behavior, are taken into account during product development.

For instance, most customers will refuse to make a repeat purchase in a hotel where they previously had an unpleasant stay experience.

Internet-based loyalty programs provide a good platform for implementing sales campaigns. In this regard, the program readily provides the marketers with customers’ contact information. Hence, reaching the targeted customers become easy.

Additionally, customers who are activity participating in the programs often visit the company’s website on a regular basis. Since most customers can be reached through the company’s website, expenditure on advertising through other media is eliminated. Finally, loyalty programs help in brand building initiatives. Concisely, they link perceived, as well as, complementary rewards to a given brand.

Internet based-loyalty programs fit into CRM in the following ways. They facilitate the provision of excellent customer services. Unlike call centers, loyalty programs create accounts for each customer through which inquiries can be made and the responses can be obtained immediately.

Most online loyalty programs have inbuilt analysis capabilities which enables CRM executives to understand the needs of the customers. Proper understanding of customers’ needs enables managers to give the right and timely responses. In hotels and restaurants where purchases can be done online, internet-based loyalty programs promotes collaboration among departments that are responsible for CRM functions.

For instance, the customers can make inquiries, pay for their bookings and earn points through their accounts. Finally, the programs enhance relationship building efforts by allowing customers to take control of the interactions. Since customers have full access to their accounts, they can easily select the reward programs that meet their needs, track the progress of their points and opt out of promotions.

The Components of a Good Loyalty Program

Research indicates that a 5% increase in customer retention through an effective loyalty program leads to approximately 75% rise in lifetime value. However, this success can only be achieved if the loyalty program is implemented successfully. In this regard, a successful loyalty program should exhibit the following components.

Financial Performance

A loyalty program is likely to fail if its financial objective is not clearly articulated. Most managers tend to ignore the financial aspect by defining loyalty programs in the context of marketing, as well as, customer relationships. In a good loyalty program, the managers should be able to predict the break-even date. Furthermore, the expected incremental revenue must be stated.

Similarly, the programs accrual and redemption terms must be stated at the onset. Successful implementation of the program can only be realized if its actual and contingent costs are known. The financial objectives can be achieved if the program facilitates an increase in sales and defends the company’s products against competitive offers.

There should be multiple ways of earning points in order to increase purchases. For instance, offering double points for certain purchase can significantly increase sales. The program should be superior to those offered by competitors in order to retain customers.

Segmentation and Membership

The objective of loyalty programs is to retain the most profitable customers. Consequently, the program should enable the managers to identify the segment of their customer base that should be targeted and the factors that attract that segment. Additionally, the program’s features should be aligned with the services that are being provided. The scarce marketing resources should be spent on the best customers.

In this regard, a spending minimum should be adopted as a requirement for participation in the program. This helps in ensuring maximum returns on investment. Besides, limiting membership will create a feeling of privilege among the participants. The program should be marketed through awareness campaigns in order to enhance its attractiveness to customers.

For instance, a hotel can unveil a catalog for its loyalty program in order to attract foreign tourists or non-regular patrons. Furthermore, the program will be effective if it promotes member referral. For instance, customers should be able to earn extra points by referring new customers.

Reward System

A good loyalty program must provide real benefits to customers on a regular basis. These benefits can be categorized broadly as soft and hard rewards. Soft rewards are offered in terms of effective personal, as well as, business services. These rewards should create a personal or emotional attachment to the company and its products. The competitors should find it difficult to imitate these services.

Hence, the services should be unique and their details should not be public. Soft rewards increase sales through incentives rather than discounts which reduce the profit margin. Hard rewards are offered in terms of the points earned per dollar spent.

They are used to increase purchases and to attract new customers. It is important to distribute the benefits on a regular basis. For instance, a loyalty program that offers a free meal after two years is likely to fail.

Service Delivery

The loyalty program must meet the expectations of the customers. In this regard, the process of earning and redeeming points should be easy to understand. Moreover, the documents required for participation should be defined. Improving customer service should be the main focus of the program.

This can be achieved by empowering employees to recognize and appreciate members. The employees should be rewarded for offering excellent customer services in order to motivate them. There should be no lapses in service quality in order to maintain high customer satisfaction.

The infrastructure

A good loyalty program must be delivered through an effective communication system. This requires adequate investment in information and communication technology. Generally, the company should acquire computer hardware and software that facilitates automation of the program.

The communication interface should facilitate effective dialogue between the customers and the company. Internal controls must also be put in place. For instance, there should be effective coordination between the company and third party organizations that are assisting in the implementation of the program.

Managing Loyalty Programs for Different Customer Segments

The concept of segmentation in loyalty programs is based on the premise that a group of customers with a homogeneous socio-economic background will have more or less similar purchasing behavior. Consequently, high customer satisfaction can be achieved by developing tailor-made services for each segment. In this context, managers should consider the following elements of customer segmentation in their loyalty programs.

Identification

The management should be able to identify loyalty program members from their pool of customers using the existing segmentation criteria. Some hotels use a tier system to differentiate the members. Similarly, some hotels use status cards to denote the status of each participant. The rationale of implementing an identification system is that it helps employees to recognize participants in the program.

This enables employees to offer high quality services, especially, to the high status members. Furthermore, adopting a means for signaling status enables members to showcase their achievements. Consequently, enrollment in the program is likely to increase as new and existing members work heard to improve their status.

Sustainability

Sustainability in a loyalty program refers to the size of each customer segment (tier) or the amount spent by each segment. In a restaurant that serves the mass market, the spending per customer is likely to be low. Thus, the size of each customer segment should be big enough to ensure profitability and sustainability in the program. In luxurious hotels, the spending per customer is often very high.

In this case, a customer segment can still be profitable even if its size is very small. Thus, it will still be possible to run a sustainable loyalty program for small segments. Generally, tiers lose their value and become difficult to serve as their sizes increase. An effective tier system should follow a pyramid format where majority of the members belong to the base tiers.

Accessibility

Companies must collect adequate information about their customers at the enrollment stage of the program. This information will enable managers to contact customers and to provide customized services for each segment. For instance, most hotels have tracking systems that enables them to predict their customers’ room preferences.

Stability

Stability refers to the extent to which the attributes of each segment will remain the same over time. The characteristic of customer segments tend to change over time. Thus, the loyalty program might lose its value if the tastes and preferences of each segment change. In this regard, flexibility will enable the program to offer rewards that reflect the changes in each segment.

Responsiveness

Customers tend to respond differently to various rewards. Hence, managers must be able to identify the benefits that appeal to each segment. Customers are likely to be responsive if the rewards and the reward system are customized according to their needs.

For instance, a value driven reward system can be used in a lower-tier program where customers earn points by making frequent purchases. This gives the company the opportunity to win customers’ loyalty at an early stage. As customers ascend through the tier system, rewards can be based on status in order to ensure differentiation.

Differentiating the Program

A company can differentiate its loyalty program in the following ways. First, it is important to use a simple point-system to reward customers. Most companies tend to use complex reward systems that are very difficult to understand. Second, a tier system should be used to segment the customers. Each tier provides unique services and rewards which facilitates customer retention.

Most loyalty programs often fail because the customers are treated equally irrespective of the longevity their stay in the program. Third, non-monetary programs should be structured around the customers’ values. The mangers must understand the customers’ values in order to differentiate their loyalty programs. Financial rewards tend to be the most common benefit of loyalty programs.

However, financial rewards might not ensure emotional attachment to the company and its products. For instance, hotels usually do not refund customers who cancel their bookings even if they have genuine reasons. This often leads to high dissatisfaction among customers.

In this case, hotels can differentiate their loyalty programs by allowing customers to resell their tickets to other customers through the company’s website. Generally, loyalty programs can be differentiated through services that ensure high customer satisfaction.

Fourth, the loyalty program can be differentiated by incorporating a sales promotion game in it. The differentiation will be successful since companies are not likely to pursue the same promotional game. The game can also be very effective in motivating customers to participate in the program.

Fifth, a creative reward system should be used to ensure loyalty. For instance, rewarding first-time customers can be better than the traditional loyalty system which focuses on existing customers. Finally, the loyalty program can only be different to others if it offers personalized services.

Using Internet-based Loyalty Programs as a Direct Marketing Tool

First, internet-based loyalty programs shed light on customers’ spending habits. They provide information such as customers’ preferences, frequency of purchases and customers’ demographics. The availability of this information eliminates the cost of collecting new data when marketing research is being done. Moreover, the information helps marketers to develop products that meet customers’ expectations.

Second, loyalty programs facilitate the implementation of sales promotions. The rewards that are associated with the sales promotion can be incorporated in the loyalty program.

Besides, the customers’ contact details can be easily obtained from the loyalty program in order to convey the information about the promotion. Internet-based loyalty programs also provide multiple communication channels such as emails and social media which make it easy to create awareness about the sales promotion.

Third, internet-based loyalty programs help in enhancing brand equity. For instance, customers who have successful redeemed rewards from a hotel are likely to share such positive experiences with other potential customers. By linking the company’s website to social media such as twitter and facebook, sharing such experiences becomes very easy.

Fourth, internet-based loyalty programs enable managers to analyze the return on investments for their marketing expenditures. The infrastructure for delivering internet-based loyalty programs often consists of analysis tools that enable marketers to track marketing expenditure. Additionally, the managers are able to match the marketing expenses with the actual returns.

This analysis makes it easy to arrive at the right marketing decision. Finally, internet-based loyalty programs facilitate cost-effective communication with customers. Through these programs, marketers will focus on using the company’s website to reach customers rather than placing adverts in print and electronic media.

Conclusion

Internet-based loyalty programs involve rewarding customers for their purchases. The programs are usually run through the company’s website. The main objective of internet-based loyalty programs is to enhance customers’ loyalty to the company. Thus, these programs create value by increasing the company’s sales through repeat purchases.

They also facilitate CRM and marketing functions. Concisely, internet-based loyalty programs provide a platform for engaging customers in a dialogue that improves their relationship with the company. Additionally, the programs provide important information about purchasing behavior. This information is used to make effective marketing decisions.

A good internet-based loyalty program should consist of effective reward and membership systems. Moreover, it should meet its financial objectives. The effectiveness of the programs can also be improved by differentiating them. This can be achieved by using a tier membership system, as well as, reward systems that are easy to understand.

References

Hansen, J., Deitz, G., & Morgan, R. (2010). Taxonomy of Service-based Loyalty Program Members. Journal of Services Marketing, 24(4), 271-282.

Lacey, R., & Sneath, J. (2006). Customer Loyalty Programs: are they Fair to Customers? Journal of Services Marketing, 18(4), 67-70.

Rosenbaum, M., Ostron, A., & Kuntze, R. (2005). Loyalty Programs and a Sense of Community. Journal of Services Marketing, 19(4), 222-233.

Uncles, M., Dowling, G., & Hammond, K. (2003). Customer Loyalty and Customer Loyalty Programs. Journal of Consumer Marketing, 20(4), 294-316.

1

Background

In recent years, one of the recurring debates in the business field concerns the critical role played by marketing strategies in enabling business entities to accomplish their set objectives, including maintaining competitive advantage in the market place (Scramm-Klein et al, 2008).

A rapidly shifting economic environment epitomized by such phenomena as turbulences in the macroeconomic environment, globalization and deregulation of markets, shifting customer and shareholder demands and expectations, and escalating product-market competition, has turned out to be the norm, necessitating organizations to reformulate and restructure their strategies and policies to remain relevant (Topolosky, 2000).

The stakes are even higher in the fashion industry, which has grown phenomenally during the last decade though it continues to be affected by a multiplicity of events, in part, due to the speedy change witnessed in the industry (Tsan-Ming et al, 2010).

One of the fundamental priority areas that have been targeted by companies in the fashion industry as a matter of urgency is the creation of brand awareness among customers and the reinforcement of customer loyalty to boost sales (Bhardwaj et al., 2010).

As demonstrated by Rogerson (2006) and Power & Hauge (2008), knowledge about brand awareness and customer loyalty in the fashion industry is in the public domain, but little is known about how the two important variables can be used effectively to stimulate customer involvement.

Through a critical evaluation of Zara’s fashion retailer marketing strategies, the proposed study will therefore focus attention to providing a framework which can be used to boost sales and improve performance by linking brand awareness and customer loyalty to customer involvement.

With an estimated 1,500 fashion retail outlets in 68 countries and € 6.26 billion in 2007 annual sales, Zara is not only one of the leading fashion retailers globally, but it has also become one of the most widely respected apparel brands worldwide, in part, due to its impressive growth in recent years (Caro et al., 2010).

According to the authors, “…this success is widely attributed to its fast-fashion business model, which involves frequent in-season assortment changes and ever-trendy items offered in appealing environments and at competitive prices” (p. 71).

To support this customer-value proposition, Zara has designed an inventive and highly responsive infrastructure that places brand awareness and customer loyalty at the heart of the whole equation (Scramm-Klein et al, 2008).

Zara’s innovative business model, according to Caro et al (2010) is to a large extent powered by a framework that ensures continuous flow of market information and customer expectations from the retail stores directly to designers. Market information usually incorporates concepts of brand awareness and customer loyalty, and Zara has done extremely well in both.

However, the proposed study makes an assumption that Zara can be able to penetrate virgin markets if it links its brand awareness and customer loyalty strategies to clothing involvement. Hill et al (2010) observes that consumers become more venturesome and willing to buy new brands if their involvement is triggered.

Academic Context

Brand awareness and comprehension about the self have achieved immeasurable significance among consumers in the fashion industry. According to Khare & Rakesh (2010), “…clothing is one domain that is supposed to fulfil both functional and symbolic needs of consumers” (p. 209).

It does not therefore come as a surprise that the emerging perception about the self and the role of brands in boosting the consumer’s image and personality have continued to spur interest among fashion marketers and researchers of modern times.

What’s more, liberalization of markets and globalization have introduced a whole new range of possibilities in the fashion industry, and consumers are now more interested in brands which denote status symbol, superior quality of life and enhancement of self-identity (Rogerson, 2006; Irvin & Montes, 2009).

The youth, in particular, are believed to be a major consumer segment interested in brand awareness and global fashion trends, and are therefore the focus of much attention from marketers in the fashion industry (Power & Hauge, 2008).

Brand loyalty, which implies some form of affective commitment towards a product, has also received broad coverage by academics and marketing practitioners (Tsan-Ming et al., 2010), and available marketing literature demonstrates that brand loyalty is of strategic significance for organizations to achieve and maintain a sustainable competitive advantage (Scramm-Klein et al, 2008).

According to Tsan-Ming et al (2010), brand loyalty in the fashion industry is a multistage process involving “…image-oriented loyalty, marketing-oriented loyalty and then sales-oriented loyalty” (p. 474).

This assertion implies that fashion retailers need to commit more energy to creating an all inclusive strategy that takes onboard customer image concerns, their own marketing paradigms as well as sales strategies to effectively gain brand loyalty.

On its part, customer involvement is a “…state of motivation, arousal of interest, evoked by a particular stimulus or situation, displaying drive properties (Khare & Rakesh, 2010 p. 210). Involvement is largely perceived as an internal state of behaviour, and may either be situational or response-based.

As such, consumers’ involvement with a product generally implies their identification with the product and how internal drives and motivations of such consumers influence their purchasing decisions (Khare & Rakesh, 2010).

The proposed study will extensively borrow from the decision theory, the two-dimensional concept of brand loyalty, and the customer involvement theory to critically evaluate how brand awareness and customer loyalty can be used to stimulate consumer involvement.

The decision theory postulates that in making purchasing decisions, customers give serious attention to a small set of brands which they are aware of and are unlikely to spend much effort in asking for information on unfamiliar brands (Macdonald & Sharp, 2003 p 1).

The two-dimensional concept of brand loyalty, on its part, insinuates that loyalty should be assessed using the customer’s behavioural criteria as well as his attitudinal criteria (Kuusik, 2007). Further, the customer involvement theory deals with issues of how much time, money, initiatives and other resources a customer attempts to employ before making purchasing decisions (Rogerson, 2006).

Consecutive studies as demonstrated by Tsan-Ming et al (2010) and Yuen et al (2010) have shown that fashion consumers are more likely to continue the relationship between brands and themselves if organizations strive to build more solid brand loyalty and brand awareness frameworks.

But while these studies have attracted multidisciplinary responses from industry players, information on how brand awareness and customer loyalty could be used to stimulate customer involvement remains scanty and outdated. More importantly, few studies have assessed the effectiveness of linking brand awareness and customer loyalty to consumer involvement.

Based on this, sentinel surveillance statistics alone are not adequate to guide informed strategy decisions in the fashion retailing industry. Proper understanding of how brand awareness and customer loyalty can be used to stimulate consumer involvement is indispensable if companies are to maintain a profitable margin in the ever-changing and ever-demanding fashion industry. It is this gap that the proposed study will seek to fill.

Methods

The proposed study will employ both quantitative and qualitative research designs to critically evaluate how Zara’s brand awareness and customer loyalty campaigns can be effectively used to stimulate consumer involvement.

Hopkins (2000) observes that most quantitative studies are concerned with evaluating the association between independent and dependent variables, and are either descriptive or experimental. In this perspective, a quantitative research design will serve the interests of this study by evaluating the relationship between brand awareness and customer loyalty on one hand and consumer involvement on the other.

The proposed study will be descriptive in nature because participants will only be measured once (Sekaran, 2006). A survey approach will be used to gather primary quantitative data among selected Zara’s customers to evaluate their perceptions on involvement.

Sekaran (2006) postulate that a survey approach in the form of a self-administered questionnaire is especially effective when the researcher is essentially interested in descriptive assessment of phenomena as is the case in the proposed study.

Primary qualitative data will be gathered by means of key informant interviews, and will target selected marketing executives working for Zara’s Oxford retail outlet, including the marketing manager.

According to Belk (2006), qualitative research designs are predominantly ideal when the researcher is interested in assessing human behaviour, values, attitudes, preferences and perceptions, not mentioning that the designs are mostly used to generate leads, notions, and concepts which can then be used to answer key research questions.

The qualitative approach will therefore be used to evaluate concepts of brand awareness and customer loyalty as well as the practices that the fashion retailer has put in place to enhance the variables.

Secondary data will be gathered by means of undertaking a critical review of literature on the underlying concepts and theories.

The data gathered will then be used to compare the research findings with other previous studies with a view to coming up with probable alternatives and recommendations that could be used to form a value-added linkage between the concepts of brand awareness, customer loyalty and customer involvement.

According to Patzer (1995), secondary data does not only avail to the researcher a pre-established degree of validity and reliability to the issues in question, but it also provides a baseline with which the gathered primary data can be objectively compared to.

The population for the proposed study will comprise marketing personnel and customers of Zara’s fashion retail outlet, Oxford branch. The sample will comprise 10 marketing executives and 150 consumers. The marketing managers will be sampled using purposive sampling technique while consumers will be sampled using convenience sampling technique.

Sekaran (2006) postulates that subjects in a purposive sample are selected based on their deeper comprehension of the variables under study (in this case, brand loyalty, customer loyalty and customer involvement), while a convenient sample includes subjects in the research framework by virtue of being in the right position or environment at the right time.

Quantitative data will be collected from the field using self-administered questionnaires while qualitative data will be collected using key informant interviews. Questionnaires, according to Sekaran (2006), are cost effective and can be administered with much ease, not mentioning that they are effective when the researcher wants to collect confidential data from study participants.

As observed by Cresswell (2005) and Stevens (2003), key informant interviews not only allow the researcher to create rapport with the subjects, hence achieving their cooperation, but they afford the researcher an opportunity to explore and probe further for more information.

Research Ethics

Ethics, according to Stanley et al (1996), refers to the suitability of the researcher’s actions as he go about interacting with individuals who either become the subject of his work or are affected by it.

In addition to requesting for a written permission from Zara’s (Oxford) corporate affairs department and the marketing department to be able to interview the relevant subjects within the premises, the researcher will also take time to explain to the subjects the nature and purpose of the study and read to them their rights, especially the right to informed consent, right to disengage from the research process at their own free will, right to withhold confidential information, and the right to privacy.

The proposed study will not employ deception techniques or offer any financial inducements since the information given is expected to be voluntary. In equal measure, the study will not subject participants to any psychological stress.

Time Scale & Resources

The time-scale for the proposed study (figure 1) is presented in the form of a Gantt’s Chart, which will undoubtedly assist the researcher to visualize the progress of each phase (Thomsett, 2009). The proposed study will take three months to complete – from June 15 2011 through to September 20 2011.

The feasibility of each component has been duly considered and conclusions drawn that the allocated time for each component will be enough to move the study forward.

Academic resources intended to complete the review of literature will be sourced from scholarly databases, including Academic Search Premier, MasterFILE Premier, and Business Source Premier, among others. Time as a resource will be critical for the successful completion of the project. Financial resources to cater for the printing of the questionnaires, travel and accommodation will also be required.

Figure 1: Time-Scale for Proposed Research Study

List of References

Belk, R.W (2006). Handbook of Qualitative Research Methods in Marketing. London: Edward Elgar Publishing.

Bhardwaj, V., & Fairhurst, A (2010). Fast Fashion: Response to Changes in the Fashion Industry. International Review of Retail, Distribution & Consumer Research, Vol. 20, Issue 1, pp 165-173.

Caro, F., Gallien, J., Diaz, M., Garcia, J., Corredoira, J.M., Montes, M…Correa, J (2010). Zara uses Operational Research to reengineer its Global Distribution Process. Interfaces, Vol. 40, Issue 1, pp 71-84.

Cresswell, J.W (2002). Research Design, Quantitative, qualitative, and mixed approaches, 2^nd Ed. Thousand Oaks, CA: Sage Publications, Inc.

Hill, N., Roche, G., & Allen, R (2007). Customer Satisfaction: The Customer Satisfaction through the Customer Eyes. London: Cogent Publishing.

Hine, T., & Bruce, M (2007). Fashion Marketing: Contemporary Issues. London: Butterworth-Heinemann.

Hopkins, W.G (2000). Quantitative Research Design. Viewed <http://www.sportsci.org/jour/0001/wghdesign.html>

Irvin, P.G., & Montes, S.D (2009). Met Expectations: the Effect of Expected and Delivered Inducements on Customer Satisfaction. Journal of Occupational & Organizational Psychology, Vol. 82, Issue 2, pp 431-451.

Khare, A., & Rakesh, S (2010). Predictors of Fashion Clothing Involvement among Indian Youth. Journal of Targeting, Measurement & Analysis for Marketing, Vol. 18, Issue 3/4, pp 209-220.

Kuusik, A (2007). Affecting Customer Loyalty: Do Different Factors have Various Influences in Different Loyalty Levels? Web.

Macdonald, E., & Sharp, B (2003). Management Perceptions of the Importance of Brand Awareness as indication of Advertising Effectiveness. Marketing Bulletin, Vol. 14, Issue 2, pp 1-11.

Patzer, G.L (1995). Using Secondary Data in Marketing Research: United States and Worldwide. Westport, CT. Quorum Books.

Power, D., & Hauge, A (2008). No Man’s Brand – Brands, Institutions, and Fashion. Growth & Change, Vol. 39, Issue 1, pp. 123-143.

Scramm-Klein, H., Morschett, D., & Swoboda, B (2008). Verticalization: The Impact of Channel Strategy on Product Brand Loyalty and the Role of Involvement in the Fashion Industry. Advances in Consumer Research, Vol. 35, Issue 1, pp 289-297.

Sekaran, U (2006). Research Methods for Business: A Skill Building Approach. Bombay: Wiley-India.

Stanley, B., & Sieber, J.E., & Nelton, G.B (1996). Research Ethics: A Psychological Approach. New York, NY. University of Nebraska Press.

Stevens, M (2003). Selected Qualitative Methods. In: M.M. Stevens (eds) Interactive Textbook on Clinical Symptoms Research. Cambridge: Cambridge University Press.

Thomsett, M.C (2009). The Little Black Book of Project Management. New York, N.Y. AMACOM.

Tokatli, N (2008). Global Sourcing: Insights from the Global Clothing Industry – The Case of Zara, a Fast Fashion Retailer. Journal of Economic Geography, Vol. 8, Issue 1, pp 21-38.

Topolosky, P.S (2000). Linking Employee Satisfaction to Business Results. New York, NY: Garland Publishing Inc.

Tsan-Ming, C., Na, L., Shuk-Ching, L., Mak, J., & Yeuk-Ting, T (2010). Fast Fashion Brand Extensions: An Empirical Study of Consumer Preferences. Journal of Brand Management, Vol. 17, Issue 7, pp 472-487.

Yuen, E.F.T., & Chan, S.S. L (2010). The Effect of Retail Service Quality and Product Quality on Customer Loyalty. Journal of Database Marketing & Customer Satisfaction Strategy Management, Vol. 17, Issue 3/4, pp 222-240.

Introduction

Customer satisfaction, though an important quotient for service or hospitality industry, does not ensure that the customers will return for repurchase . Therefore, the important question that businesses face is what would ensure the customers to return to them. This brings the marketers to the concept of loyalty. One must note that both the concepts are attitudinal and therefore, largely theoretical.

However, such attitudinal commitment on part of the customers ensures that the profits of the organization would return. For the success of a company in the service sector, organizations must ensure customer satisfaction and nurture brand loyalty among its consumers. Brand loyalty will ensure repeat purchase, which in turn establishes the profit of the company.

In case of a company like Starbuck, operating in the service hospitality retail business, this is of great importance, since it faces high competition as well as has to satisfy customers in order to ensure repeat purchase. Further, as this sector does not have a switchover cost therefore, developing brand loyalty is the only way to ensure sustainability of profit.

Starbuck

Starbuck is a coffee company established in 1971. The main products that the Starbuck stores offer are various types of hot and cold beverages such as coffee and tea and food. The company operates globally, though it originated in the United States. The products are competitively priced and Starbuck maintains a standardized store ambience for all its chains. This paper tries to understand the link between satisfaction and loyalty of Starbuck’s customers.

Significance of the Study

A well-established axiom in marketing literature is, satisfied customers lead to brand loyalty. In other words, customer satisfaction has a direct influence on brand loyalty. This prevalent axiom makes creation of customer satisfaction a very important aspect for producers of every product (goods or services).

The probability of a customer buying a product more if he/she is satisfied with the product is higher. In this connection, one can intuitively deduce that higher the degree of customer satisfaction, higher is the degree of loyalty towards the product, as higher satisfaction would prompt higher repeat purchase. Therefore, greater is the amount of customer satisfaction, greater is loyalty.

Consequently, this conjecture makes brand loyalty one of the most important aspects of a firm’s continuity and/or future profit. From a different angle, it can be observed that customer satisfaction is not only beneficial to the firm but also to the customer.

Satisfaction to the customer actually indicates that he or she has found the product that he/she requires and that through consumption of the acquired product the need is satisfied without any negative outcome that would have precipitated harsher step like complaining. Therefore, customer satisfaction actually indicates to the customers that their need for the product is satisfied on consuming the specific brand.

Though many researchers have tried to establish a relationship between consumer satisfaction and loyalty, the relationship is not always perfect and not always positive . However, a strong relationship between the two is yet to be established. This paper undertakes a case study of Starbucks. The aim of the paper is to understand the effect of customer satisfaction and brand loyalty specifically in case of Starbucks.

In order to do this, this paper will study the two different kinds of brand loyalty – spurious and true brand loyalty, find a relationship between the two different kinds of customer satisfaction – latent, and manifest customer satisfaction.

Further, the paper will also establish a hypothesis to establish a relationship between the two different kinds of customer satisfaction and brand loyalty. Finally, the paper will make recommendations to the marketers regarding the suitable marketing practices for Starbuck and areas for future study.

Hypotheses

From the above literature review, we come across two hypotheses:

H1: A higher degree of customer satisfaction will lead to a higher degree of brand loyalty.

H2: The relation between customer satisfaction and brand loyalty is moderated by personal character of the customer.

Purpose of the Study

The purpose of the paper is to understand the relationship between customer satisfaction and brand loyalty. The paper will gauge the influence of customer satisfaction or dissatisfaction on repeat purchase and loyalty. The study will be directed towards Starbucks and the satisfaction that consumers of Starbucks products and services feel and how that influences their brand loyalty.

Literature Review

Customer satisfaction

Customer satisfaction is defined as a comparative evaluation of a consumer’s post-purchase appraisal of the product purchased to her pre-purchase expectations . Engel, Blackwell, and Miniard defined customer satisfaction as “the outcome of the subjective evaluation that the chosen alternative (brand) meets or exceeds the expectation.”

Literature on customer satisfaction provides various definitions of customer satisfaction. However, what is more important is that there must be a perfect understanding of why satisfaction is important. Hill and Alexander point out that 10 to 30 percent of the loss in customer is due to dissatisfaction which is a high cost for service business, as this not only includes the cost of lost customers but also the cost of attracting new customers.

Literature has shown two different measures of customer satisfaction – first, is the difference between product expectation and performance and second is based only on performance. However, one must keep in mind that satisfaction is relative in nature and varies with the situation and circumstances.

Therefore, satisfaction research must be aimed at understanding the variations in perception of satisfaction with the changes in situations . It is also believed that the customers must cross the “psychological barriers” in order to undertake an explicit understanding of the brand . The different types of satisfaction that literature has delineated are manifest and latent satisfaction.

Manifest satisfaction is the “outcome of the explicit subjective evaluation that the chosen alternative (brand) meets or exceeds the expectations.” In other words, when a consumer explicitly evaluates a product based on which she chooses the brand with full understanding and awareness is referred to as manifest satisfaction. When the consumer undertakes an implicit evaluation of the alternatives available to him, and it exceeds to meets his expectations out of the product, it is called latent satisfaction.

Latent satisfaction is the outcome of implicit evaluation while manifest satisfaction is that of explicit evaluation of the brand. In case of latent satisfaction, the consumer is not completely aware of his expectations and merely accepts the brand. The study of satisfaction is based on four criteria as has been observed through previous literature are expectation, performance, satisfaction and disconfirmation.

Expectation related to customer satisfaction relates to the estimated performance of the product. According to Miller , expectation is of four types namely desirable, minimum, expected, and ideal. Day distinguished expectation based on product or service, the cost of the product, and the benefits obtained after using it.

Performance has been used as a standard for evaluation of satisfaction by many researchers. Olshavsky and Miller and Olson and Dover manipulated the actual performance of a product to gauge performance, however, their study concentrated more on the change in expectation due to change in performance rather than estimating the change in satisfaction due to change in performance.

Churchill and Surprenant that though, one may argue that an increase in performance would only lead to an increased satisfaction, but the argument is plausible only when one considers expectations and disconfirmation effects on satisfaction. According to them, if performance of a product is constrained by expectation, then one would expect little increase in satisfaction even though performance increases considerably, if the expectation of the consumer remains constant.

Disconfirmation, meaning discrepancies, arises from the difference between earlier expectation and actual performance of the product or service . The magnitude of the disconfirmation that is derived determines the satisfaction or dissatisfaction of a consumer on consumption of a particular product or service.

Measuring disconfirmation has been stresses by many scholars like Oliver and Churchill and Surprenant who believe that it is important to measure disconfirmation as the measure has a specific additive effect on satisfaction. If one followed traditional literature it would be difficult to distinguish between expectation, performance, and disconfirmation as the third is the difference between the first two .

Satisfaction is the outcome that a consumer faces once he/she consumes the product/service. Satisfaction is the difference between the rewards he/she receives with the price paid. Pfaff believes that both cognitive and affective models may be used in describing satisfaction while LaTour and Peat posits that the attitude one has towards a product is a pre-consumption state of the consumer while satisfaction is the post-consumption state.

Recent research on customer satisfaction has determined customer satisfaction using the performance model and has shown that satisfaction of the customer is the end-state of consumer and an antecedent of the consumption process . These new studies also consider the four parameters discussed earlier such as expectation, performance, disconfirmation, and satisfaction.

Brand Loyalty

Brand loyalty is defined as the “positively biased emotive, evaluative, and/ or behavioral response tendency toward a branded, labeled, or graded alternative or choice by an individual in his capacity as the user, the choice maker, and/or the Purchasing agent.” Aaker presents another, more recent definition of brand loyalty, which states that, the possibility of a customer’s intentions to switch a brand when certain changes are incorporated to the product/services provided by it.

Brand loyalty is important for firms as it brings forth new customers, repeat purchase, and good publicity to the brand . Aaker (2009) distinguishes brand loyalty into three levels –

1. Non-loyal buyers who are indifferent to the brand,
2. Customers who are satisfied or rather are not dissatisfied with the product/service, and
3. Are completely satisfied with the product and face a switching cost to change over to some other product.

Aaker points out that for brand loyalty to exist it must have “prior purchase and use experience” of the customer. Some other characters of brand loyalty as has been delineated by Sheth & Park are:

1. Brand loyalty is not constrained to the point where a purchase is made.
2. Brand loyalty may not be asserted by repetitive buying behavior, as this is believed to be a purely emotive quality.
3. Brand loyalty is present at nonverbal level.
4. Further, the role of the consumer as brand loyal as a buyer, decision-maker, or consumer has to be determined in order to understand brand loyalty more specifically.
5. Brand loyalty differs between products/services and classes of products.

Bloemer & Kasper points out that there are two different types of brand loyalty is based on commitment to the brand and “spurious brand loyalty”. Many other studies on brand loyalty has been seen that show that when consumers show their satisfaction with the performance of the product/service provided by the brand, it enhances the loyalty he/she feels . This actually shows an emotional bond that a consumer feels towards the brand and positively affects the repurchase intention of the consumer .

Relation between Customer Satisfaction and Brand loyalty

The relationship between brand loyalty and customer satisfaction of product and services has been conducted by many researchers . Of these Bloemer and Kasper (1994) presented a complete and detailed study the relationship between the manifest and implicit satisfaction of the customer with that of brand loyalty.

They tried to establish a relationship between the two types of satisfaction (manifest and implicit) with the two types of loyalty (spurious and true). The research found support for two of its hypothesis, which showed that manifest satisfaction had a positive relationship with brand loyalty. The second finding of the research was that manifest satisfaction had a stronger influence on gaining true brand loyalty than latent satisfaction. Their research therefore concluded:

Consumer satisfaction positively affected brand loyalty. However, it appeared that it is important to differentiate between the impact of the manifestation on true brand loyalty and the impact of latent satisfaction on true brand loyalty. The impact of manifest satisfaction on true brand loyalty was larger than the impact of latent satisfaction.

Homburg and Giering studied the relationship between customer satisfaction and loyalty of brands. They found a gap in the satisfaction and loyalty research and believed that the research has been neglected the inclusion of a moderator variable in the research.

They conducted a multi-group causal analysis to see the effect of personal moderators on satisfaction-loyalty relation and found that the relation is strongly affected by the personal characters of the customer such as age and income. In other words, this relation varied from person to person.

Bloemer and Ruyter studied the relationship between store image and the customer satisfaction and loyalty. This study was done in a retail setting. Again, a distinction was made between the true and spurious loyalty of the customer and a relation was found between the manifest and latent satisfaction of customers. Their study showed no effect of store image on store loyalty, but a strong relation between satisfaction and store loyalty.

Sivadas and Baker-Prewitt studied a random sample survey over the telephone of 542 shoppers. The aim of the research was to examine the relationship between quality of “service, satisfaction, and store (brand) loyalty” . The research findings show that service quality and customer satisfaction had a positive relationship.

Further, satisfaction led to repurchase decision, and recommendation to other probable customers. Therefore, satisfaction fostered loyalty towards the store or brand. This research also showed satisfaction and loyalty as attitudinal factors. Bowen and Chen developed a model for hospitality industry to identify the attributes that increase loyalty.

Their research used the “database of a hotel to draw the samples and uses group as well as mail survey” . They received 564 completed surveys and an analysis of these showed that customer satisfaction and brand loyalty had a non-linear relation.

Theory for establishing Link between Satisfaction and Loyalty

Theory of Satisfaction

From the above literature review, it is clear that customer satisfaction is defined as a post-purchase attitude/emotional state based on an evaluation of pre-purchase expectations and post-purchase performance. The theory that is used for analyzing the satisfaction in this paper is based on Disconfirmation theory, which is the satisfaction derived by a comparison of the expectations, perceptions and performance of the product .

The three satisfactions that is derived following this theory are – 1) neutral satisfaction when the expectation and performance tally, 2) disconfirmation when performance betters expectations, and 3) negative disconfirmation when performance is lower than expectations leading to dissatisfaction.

The dimensions used for customer satisfaction in this research are price, quality of the product, quality of service, and location. Literature on satisfaction suggests that the most important factor determining satisfaction is the tangible factors such as quality of service. These help in measuring responsiveness of the employees in the store, assurance, and empathy .

Repeat purchase is one of the most salient indicators of overall satisfaction . Therefore, the effect of satisfaction is also an indicator of the involvement of the customer with the brand as well as the loyalty the he or she has towards the brand. In this paper, we further study satisfaction and its effect on involvement and loyalty.

Theory of Involvement

Involvement is demonstrated as purchase involvement, which shows the reasons that triggers purchase intentions, and comprises of “time, effort, and cost” . In this study, we will consider primarily purchase intentions, which are based on factors such as service failure and ego involvement .

Theory of Loyalty

Loyalty is the deep commitment that the consumer experiences to repurchase the services/product of the brand. It is a “deeply held commitment to re-buy or re-patronize a proffered product or service consistently in the future, thereby causing repetitive same-brand-set purchasing, despite situational influences’ and marketing efforts’ having the potential to cause switching behavior.” .

Loyalty towards a brand may be both attitudinal commitment such as insensitivity to the price of the product as well as a implicit loyalty behavior as had been observed in previous researches by Bloemer and Kasper (1994). Further, loyalty also reflects through positive word of mouth promotion of the brand and a positive comparison of the brand with that of the other brands is also available in loyalty literature .

As the literature review has shown, satisfaction helps a consumer decide the standard on which one may determine whether a product/service is satisfactory and if one should or should not switch from the product. Hence, whether the consumer should switch or remain with the brand is explained in the satisfaction-loyalty link literature. One must understand, the consumers look at the next best alternative in appraising a service experience.

The experience of purchasing and having coffee at a Starbuck store is largely dependent on the store experience that the consumer may have. When the current level of expectation from the consumed service drops from the comparison with the next-best alternative, the customer decides to switch over to another brand.

Therefore, customers who are satisfied with the product (i.e. coffee or other eatables) and the service (store ambience and purchase experience) at a Starbuck store are more likely to continue their purchase at the store vis-à-vis dissatisfied customers. Therefore, when guests are dissatisfied they are more likely to be motivated to discontinue the relationship with the brand.

Methodology

Research Design

For this research, I propose to contact 2 to 3 Starbuck stores in my locality and examine the relation between customer satisfaction and loyalty in these stores. These stores will be located in the heart of the city’s main business areas and would have a large customer group. The data would be collected from the customers who make a purchase at these Starbuck stores.

A survey questionnaire will be developed to collect data from the customers of Starbucks asking questions related to:

1. The use of Starbucks’s services (such as frequency of visit to Starbuck, the length of their use of Starbuck’s services, factors that they considered important for choosing Starbuck as their brand, type of service taken from Starbuck (i.e. coffee or food), and if they opt for any other café and why).
2. Overall satisfaction of the customer from the service experience at Starbucks
3. Satisfaction that the customer derived from his/her interaction with the sales people at the store and with the tangible ambience of the store
4. The reasons that were responsible for his/her decision making in choosing Starbucks
5. The degree of loyalty that the customer feels towards Starbucks, and
6. Moderating factors which are the demographic factors like age, gender, income, etc.

The research design that is opted for the research is presented below in figure 1.

Figure 1: Customer satisfaction and loyalty among Starbuck’s customers – research design

Construct for the Research

Satisfaction of the customer in using Starbucks products and services were measured using thirteen items. These evolved around various products and services that Starbuck provided. Responses were measured in five-point Likert scale ranging from very satisfied to very dissatisfied.

In order to measure involvement, a few questions related to ambience of the Starbuck store, convenience, timelines, and other measures as adopted by Ganesh et al. The measures as demonstrated in the literature are self-image, intention of familiarity, and effort of the store salespersons.

Brand loyalty was judged using various parameters such as price insensitivity, which indicated attitudinal loyalty, intention of repeat purchase, and the inclination to spread positive word of mouth promotion of the company. These items were adapted in the questionnaire for Starbuck and seven items were included to understand brand loyalty adapted from Ganesh et al. (2000). Both involvement and loyalty were measures in five-point Liker scale.

Sampling

Random sampling of the customers visiting Starbucks stores will be used for data collection. The customers making purchase at the Starbuck stores will be asked questions.

Data Collection

Data will be collected through survey questionnaire from customers of Starbuck stores.

Statistical Analysis

Regression modeling will be done to understand the relationship between satisfaction, involvement, and loyalty. Further, the effect of the moderating factors will also be considered on this relation.

Questionnaire Development

The questionnaire will be divided into four sections. The first would capture the demographic information; the second would have questions related to customer satisfaction, then involvement, and in the end, customer loyalty. The questionnaire pattern for the different sections is presented below.

Limitation of the Research

The study is limited to the case study of Starbuck and analysis of the satisfaction and loyalty of its customers, and generalization of the results to others establishments may not be possible. However, the methodology may be replicated to suit the purpose of the researchers.

The study lacks scope, as it does not make any difference between the two types of satisfaction and the two types of loyalty. No relation is derived between the types of satisfaction and loyalty. The research would gain greater depth had this been done. Another limitation of the research is that it makes no comparison of the customer’s satisfaction and their intention to defect to the closest competitors of Starbuck.

References

Aaker, D. A. (2009). Managing brand equity. SimonandSchuster. com,. New York: Simon and Schuster.

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Anderson, E. W., Fornell, C., & Lehmann., D. R. (1994). Customer satisfaction, market share, and profitability: findings from Sweden. The Journal of Marketing, 53-66.

Bloemer, J. M., & Kasper, H. D. (1994). The Impact of Satisfaction on Brand Loyalty: Urging on Classifying Satisfaction and Brand Loyalty. Journal of Consumer Satisfaction, Dissatisfaction adn Complaining Behavior 7, 152-160.

Bloemer, J. M., & Kasper, H. D. (1995). The complex relationship between consumer satisfaction and brand loyalty. Journal of economic psychology 16(2), 311-329.

Bloemer, J., & Ruyter, K. D. (1998). On the relationship between store image, store satisfaction and store loyalty. European Journal of Marketing 32(5/6), 499-513.

Bloemer, J., Ruyter, K. D., & Peeters, P. (1998). Investigating drivers of bank loyalty: the complex relationship between image, service quality and satisfaction. International Journal of Bank Marketing 16(7), 276-286.

Bowen, J. T., & Chen, S.-L. (2001). The relationship between customer loyalty and customer satisfaction. International journal of contemporary hospitality management 13(5), 213-217.

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Deng, Z., Lu, Y., Wei, K. K., & Zhang, J. (2010). Understanding customer satisfaction and loyalty: An empirical study of mobile instant messages in China. International Journal of Information Management 30(4), 289-300.

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Ganesh, J., Arnold, M. J., & Reynolds, K. E. (2000). Understanding the customer base of service providers: an examination of the differences between switchers and stayers. The Journal of Marketing 64(3), 65-87.

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Hill, N., & Alexander, J. (2006). The Handbook of Customer Satisfaction and Loyalty Measurement. Hampshire, UK: Gower Publishing, Ltd.

Homburg, C., & Giering, A. (2001). Personal characteristics as moderators of the relationship between customer satisfaction and loyalty—an empirical analysis. Psychology & Marketing 18(1), 43-66.

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Oliver, R. L. (2010). Customer Satisfaction. NA: John Wiley & Sons, Ltd.

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Whistle-blowing is a recommendable practice whenever an organization engages in an unethical practice (Hoppe 2010). Stakeholders should reveal every form of abuse, danger, or negligence in order to safeguard the rights of many people. According to the case study, Hughes Aircraft Company’s Micro-electronic Circuit Division was producing numerous computer chips for different customers. The company was ‘required to ensure its chips passed specific quality assurance (QA) tests’ (Bowyer 2000, p. 2).

The firm was also expected to present various documents showing that such chips met all the requirements. Ruth Aldred and Margaret Goodearl became aware of the malpractices at the company. They decided to report the matter to the relevant authorities. This discussion examines the findings of the case. It also offers powerful recommendations that can be used to deal with fraud in different companies.

Findings of the Case

Many companies engage in unethical or unacceptable business practices. Most of the chips produced by Hughes Aircraft Company were not being tested. Some of the chips also failed to fulfill the required military specifications. The supervisors at the company ‘forced the employees to keep quiet about the problem’ (Bowyer 2000, p. 2). Goodearl and Aldred later reported the malpractice to the authorities in 1986. The company had also harassed and intimidated the two whistle blowers (Bowyer 2000).

According to the author, the two employees lost their jobs after reporting the issue to the relevant authorities. After losing their jobs, the individuals ‘underwent significant lifestyle changes’ (Bowyer 2000, p. 5). For example, Goodearl and her husband became bankrupt. However, the workers ‘succeeded and eventually won the case’ (Bowyer 2000, p. 5). The False Claims Act (FCA) has been critical towards uncovering most of the crimes committed by many companies.

The company made it impossible for the whistle blowers to emerge victorious. The case study shows how the company was eventually forced to compensate the two employees. The government ‘used the FCA to take over the case in 1992’ (Bowyer 2000, p. 5). The firm ‘paid $3,159,000 to the government and $891,000 to the whistle blowers’ (Bowyer 2000, p. 5). The whistle blowers also ‘sacrificed their careers in order to achieve justice’ (Bowyer 2000, p. 5).

Recommendations

This discussion presents powerful recommendations that can support the needs of many companies. Employees should be ready to report any kind of abuse in their organizations (Lewis 2011). This practice will ensure every company produces quality products. The article “Goodearl and Aldred Versus Hughes Aircraft: A Whistle-Blowing Case Study” also encourages more students to equip themselves with new ideas about whistle-blowing. The practice will make it easier for them to understand the importance of the False Claims Act. Citizens and students should also read more cases in order to understand this issue much better (Bowyer 2000). Policymakers should also support the False Claims Act in order to protect every consumer.

Business organizations can also acquire new concepts from this case study. For instance, they should promote the best ethical practices in order to deliver quality services to their customers (Pierson, Forchit & Bauman 2010). The practice will ensure such companies remain ethical. They will also protect themselves from different civil litigations (Duska 2010). The practice will also ensure more businesses become socially responsible. Many companies will also intimidate and threaten their employees whenever they raise their concerns (Heywood 2009). That being the case, new policies should be implemented in order to protect every whistle blower. This practice will ensure more companies become ethical. The strategy will also safeguard the rights of many stakeholders.

List of References

Bowyer, K 2000, Goodearl and Aldred Versus Hughes Aircraft: A Whistle-Blowing Case Study. Web.

Duska, R 2010, Whistle-blowing and Employee Loyalty. Web.

Heywood, J 2009, Engineering Education: Research and Development in Curriculum and Instruction, Wiley, New York. Web.

Hoppe, E 2010, Ethical Issues in Aviation, Ashgate Publishing, New York. Web.

Lewis, D 2011, Whistle-blowing at Work, A&C Black, New York. Web.

Pierson, J, Forchit, K & Bauman, B 2010, ‘Whistle-blowing: An Ethical Dilemma’, AJIS, vol. 1, no. 1, pp. 58-62. Web.

Defining the Problem

The paper is devoted to the analysis of the key elements of the research article “Shoppers’ Satisfaction Levels Are Not the Only Key to Store Loyalty” by Mario Miranda, Laszlo Kónya, and Inka Havrila.

Miranda, Kónya, and Havrila intended to explore shopper behavior concerning loyalty and customer satisfaction factors. They narrowed the research problem to finding out the effects that the shopper satisfaction-related factors (in particular, discounts) have on the loyalty concerning the “primary” shop. The problem is relevant to the topic and underresearched; also, the researchers have the resources to study it, which makes it researchable (DePoy and Gitlin 58).

Establishing Research Objectives

The objectives of the research included:

• Defining the correlation between the store attributes and shopping behavior and customer satisfaction.
• Defining the correlation between the store attributes and shopping behavior and customer loyalty.
• Finding out if the satisfaction factors contribute to the loyalty ones.
• Finding out if satisfaction influences loyalty.

Type of Research

The study has a fixed design and uses qualitative methods of data analysis. It also contains an experimental element: the proposition of a hypothetical opportunity to have a discount elsewhere. Still, there is no control group, so it cannot be called experiment proper (DePoy and Gitlin 138). Instead, the study can be considered explanatory: it studies and describes the relationship between satisfaction and loyalty factors (DePoy and Gitlin 62).

Literature Review: A Summary

The question of customer loyalty has always attracted the attention of business researchers. According to Miranda, Kónya, and Havrila, several studies indicate that customer satisfaction has relatively little impact on loyalty. However, prior to the article by Miranda, Kónya, and Havrila, there was no scientific evidence to answer the question of whether the elements that generate customer satisfaction could also maintain the loyalty (222). The study was aimed at rectifying the situation.

Describing the Model

The research was aimed at the confirmation of existing theory (the lack of significant impact of satisfaction on loyalty) and exploring a new area in the field (the correlation between the factors influencing loyalty and satisfaction). Still, the second aim was primary, which makes the study exploratory in nature (DePoy and Gitlin 375).

Hypothesis

The authors settle for two null hypotheses: one denying the correlation between satisfaction concerning the primary store and store attributes as well as shopping patterns; the second denied the correlation between loyalty for the same store and the same variables.

Population

The population of interest, for which the results are supposed to be generalizable, are the shoppers; the specifics of grocery stores is also of importance.

Sample

The final sample included adult Australian 934 shoppers with a “primary” store who happened to exit the grocery stores that the researchers were monitoring for two weeks. In other words, the convenience sampling method was used.

Data Collection

The tool for data collection was a structured questionnaire (Likert scale) with 31 variables. It was aimed at defining shopping behavior, satisfaction, and loyalty to shops.

Analyzing Data

The Likert scale provides the data with assigned values that are easy to process. The data was arranged through multiple regression methods in two mathematic models (for the satisfaction and loyalty).

Results

The results indicated that the factors that tend to have an impact on customer satisfaction rarely correlate with continued loyalty to a store.

Limitations

The study did not take into account a number of population characteristics (for example, income) that could affect their shopping behavior and perceptions (231).

Conclusions

The key conclusion consisted of the idea that loyalty is not defined solely by customer satisfaction. As a result, the authors suggest that customer loyalty factors should be paid equal attention to customer satisfaction ones. The authors believe that by using the mixture of approaches, both positive outcomes (satisfaction and loyalty) can be achieved. The authors also mention that their results correspond to the existing literature and indicate that satisfaction does not have a significant impact on loyalty.

Works Cited

DePoy, Elizabeth, and Laura N Gitlin. Introduction To Research. London: Elsevier, 2016. Print.

Miranda, Mario J., László Kónya, and Inka Havrila. “Shoppers’ Satisfaction Levels Are Not The Only Key To Store Loyalty”. Marketing Intelligence & Planning 23.2 (2005): 220-232. Emerald. Web.