2. ABSTRACT
This research study introduces a comprehensive conceptual framework of customer loyalty
within the retail sector. It emphasizes on the perceived loyalty amongst fast moving consumer
goods and attempts to explore the moderating effects of the various different factors that
might influence them.
The researcher will begin by creating an understanding of the term “customer loyalty” and its
significance importance in the retail sector. Additionally, the researcher shall also attempt to
explore the purchase decisions made by the consumers and what really prompts them to be
loyal to certain brands of product while simultaneously evaluating the importance of price,
quality, brand or any other factor that might impact their loyalty status and purchase decision.
Finally, the research study will conclude by delineating the factors which impacts consumer
loyalty at the same time trying to establish a means of measuring the impact of consumer
loyalty within certain products in the retail sector.
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3. TABLE OF CONTENTS
Section 1: Introduction 4
Relevance of the Proposed Research to Business Research 4
Key Research Studies and Relevant Bodies of Theory 4
Research Objectives 5
Section 2: Account of Method 6
Research Design 6
a) Secondary Research 6
b) Primary Research 6
Data Collection 7
Data Analysis 8
Section C: Discussion 9
How the Methodology addresses the Research Question 9
Drawbacks 9
Conclusion 10
References 11
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4. INTRODUCTION
The purpose of this research proposal is to delineate the concept of customer loyalty
and determine the various set of factors which might impact consumers’ loyalty within the
retail sector.
Moreover, here the researcher shall be examining this conundrum by not only
investigating the different authors’ insight into the realm of customer loyalty but also by
conducting a primary research in order to gain a better understanding of the factors affecting
customer loyalty
Relevance of the Proposed Research to Business Research
Fast moving consumer goods within the retail sector, are goods that are sold relatively
quickly in high volumes and lower prices. When it comes to such items, customer loyalty
plays a colossal role. The proposed research will help glean into the level of customer loyalty
engaged within such goods and how this can be enhanced.
Key Research Studies and Relevant Bodies of Theory
A customer can be defined as a person who becomes acclimatizes to buying from you
or your company. This custom is developed through purchase and interaction on recurrent
occasions over a consistent period of time. However, until there is no repeat purchases this
person is only your buyer. Lowenstein, Michael W. (1997) A true customer is then said to be
developed over time. Customer loyalty on the other hand is when a buyer tends to make
repeat purchases on regular intervals, across various products and services. Additionally he or
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5. she also refers your products to their friends, family and peers and at the same time displays a
strong resistance towards the pull of your competitors.
Customer loyalty is a very strong and reliable indicator of a company’s sales as well
as financial growth. Lowenstein, Michael W. (1997) Customer loyalty can be best explained
as an attitudinal state which reflects trust, value, and commitment within the relationship
between the suppliers and the customers. Satisfaction is one of several predecessors of
loyalty. One of the most important aspect influencing loyalty amongst customers is the basic
offer of a unique value-delivering advantage be derived or provided by competitors. Thus
firms need to develop positive value-based exit barriers to achieve loyalty. Additionally the
collection and monitoring of customer data is needed for success and two-way
communication is vital. Buttle, Francis (2006)
Substantial Research has been carried out from time to time in order to determine the
reasons behind a consumer’s loyalty within the retail sector and what stimulates it. Many of
these consumer decisions are triggered by product’s quality, attributes and prices while others
arise internally from consumers’ own emotions, feelings or perceptions associated with a
certain brand or the environment surrounding it. (Hawkins, Del., Best, Roger., Coney,
Kennedy., 1995)
Research Questions to be Investigated
The key research objectives that will be evaluated within the course of this study
include:
An in-depth examination of the term “customer loyalty” with the retail sector and
its relevance to the marketers as well as the consumers.
An exhibition of the various different antecedents that is likely to impact customer
loyalty.
To distinguish between customer loyalty and repeat purchase behavior
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6. To ascertain the impact of consumer purchase patterns on customer loyalty
An assessment of various factors such as demographics, psychographics and life
styles and their impact on customer loyalty.
During the course of this study, the researcher shall discuss the importance of customer
loyalty within the retail sector in the United Kingdom. Here, the customer loyalty pyramid
shall be explained, followed by why companies aim to maintain a culture that is totally
committed to their customers. For such companies creating and at the same time sustaining
customer perceived value is paramount. Additionally this research will also be exploring the
development of the customer retention culture as well as the Seven-S Framework developed
by the McKinsey & Company and how it helps companies scale its customer loyalty. Griffin,
Jill. (2002)
ACCOUNT OF METHOD
Choosing between the various different methods of research is a crucial stage. It is the
research design that coordinates the methodology with the stated objectives of the research.
Research Design
Keeping in mind, the research topic, the researcher shall mainly adopt an exploratory
approach throughout the course of study. The primary aim would be to get a strong grasp on
an understanding of the notion of what really influences customer loyalty and its relevant
underlying areas such as customer preferences, attitudes, lifestyles and purchasing patterns.
Additionally, a descriptive approach will also be adopted at a number of places in
order to provide an accurate snapshot of some of the key aspects of market and customer
segmentation. This will not only help in developing a tentative and speculative hypotheses
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7. but will also be helpful in evaluating and assessing the impact of various factors such as
price, promotion, perceived risks etc on customers’ loyalty towards any certain fast moving
consumer good.
Secondary Research:
Secondary data is an integral part of any research. It not only serves as a reference
base for comparing the accuracy and validity of the primary research. But in fact, it is also a
cheap, cost effective way of gathering important data that will assist the researcher
throughout the course of study. (Aaker, Kumar & Day)
As part of the secondary research, a number of books, research journals, magazines,
periodicals, newspapers and most importantly the internet will be referred to in order to gain
a better insight about the factors inhibiting customer loyalty.
Primary Research:
Many times secondary research may not just be sufficient enough, especially when it
comes to understanding the various consumer purchase patterns, behavior, product usage or
even when seeking their psychological or socio-cultural information. Schiffman, Kanul.,
(2001) This gives rise to the need for primary research. Primary Research can be defined as
the data that is collected first hand in order to solve a specific problem at hand. Fleming, D.
& Domegan, C., (2003)
Data Collection
A major portion of the data that will be collected for the purpose of analysis will be
through the circulation of Survey questionnaires and in-depth interviews. Moreover, keeping
in mind the nature of the research, the researcher will be particularly be leaning towards
Qualitative Research. These are collection of data that is open to interpretation and may also
not be required to be validated statistically. Additionally it not only helps to evaluate what is
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8. in the minds of the consumers but also allows you to discover their feelings, thoughts,
behavior and expectations. Fleming, D. & Domegan, C., (2003)
In order to conduct a cost effective and an accurate primary research, the researcher
shall first start with a simple, approximately ten minutes self administered survey
questionnaire to gauge the factors that impact customer loyalty within the retail sector. This
however seems to be the most feasible starting point and will be targeted towards
approximately five hundred target respondents. The respondents will be chosen at random
and will mainly comprise of the researcher’s friends, family, peers and co-workers. Each of
the questions in the questionnaire survey will be constructed carefully using simple and easy
wordings that are self explanatory thus avoiding any ambiguity or uncertainty.
Furthermore, apart from this the sampling frame would be based on simple and
convenient random probability sample frame. This would mainly comprise of in-depth
interviews with professionals belonging to the retail sector. These are an unstructured and a
direct way of obtaining the required information. Fleming, D. & Domegan, C., (2003) This
would in turn help in assessing their views regarding customer loyalty and what are the
factors that actually impacts customer loyalty. These interviews will help in understanding
the information gained through the survey questionnaires and allow the researcher to take this
study a step further. Moreover, the use of these in-depth interviews (both structured and semi
structured) will go hand in hand in discovering the respondents’ attitudes, true motives and
reasons for being loyal to a particular set of brands.
Data Analysis
Analyzing data is an integral part of every research. It is the set of methods and
techniques used to obtain significant insight from data. (Aaker, Kumar & Day) In order to
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9. glean out the various objectives stated earlier, a number of books shall be referred to in order
to understand the various data collection techniques.
Before starting the actual analysis of the data, the researcher shall collect, collate, edit,
code and tabulate data while simultaneously checking it for consistency, completeness and
ambiguity. Moreover, different types of scales will also be employed in order to obtain
significant useful data via questionnaire survey. The final results will then be analyzed
statistically, displayed graphically and interpreted accordingly.
DISCUSSION
How the Methodology addresses the Research Question
The proposed methodology will help the researcher gain a better insight into the realm
of customer loyalty. Additionally, it would clearly identify the different variables that have
both positive and negative impact on the loyalty of the customer towards certain goods, thus
allowing companies to manipulate these variables in their favor in the future and affect
customer loyalty.
Key Drawbacks
Although after conducting a thorough preliminary analysis, the research presents no
such set-backs or limitations. However, at the same time, the researcher feels time and
financially bound. Additionally, the research may also be geographically bound which might
present another set-back in the entire course of study.
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10. Conclusion
This research study on “Impacting Customer Loyalty” will form the foundation
towards creating an understanding of the concept of customer loyalty within the retail sector.
Thus, enabling professionals within this field, to develop various measures in order to
promote customer loyalty within their business. Additionally, it will also help consumers
become more aware of the choices they make and why they make it.
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11. REFERENCES
Aaker, Kumar & Day, 1995, Marketing Research, 5th edition, John Wiley & Sons, Inc.,
United States
Assael, Henry., 1984, Consumer Behavior and Marketing Action, 2nd edition, Kent
Publishing, USA
Buttle, Francis (2006, July 11), Does service failure influence customer loyalty?
Available from http://onlinelibrary.wiley.com/doi/10.1002/cb.67/abstract [May 19th
2011]
Dick, Alan S., 1994, Customer Loyalty: Towards an Integrated Conceptual Framework,
Journal of Academy of Marketing Science
Domegan, Christine., Fleming, Declan., 2003, Marketing Research in Ireland, 2nd edition,
Gill & Macmillan, Dublin
Griffin, Jill., 2002, Customer Loyalty- How to Earn It, How to Keep It. Available from
http://www.questia.com/PM.qst?a=o&d=108852298 [May 19th 2011]
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12. Hawkins, Del., Roger, J., 1995 Consumer Behavior-Implications and strategy, 6th edition
Irwin Inc, USA
Hobert, Neil., Speece, Mark., 1993, Practical Marketing Research: An Integrated Global
Perspective, Simon & Schuster, Singapore
Kotler, Philips, 2000, Marketing Management, Millennium Edition, Prentice Hall Inc., New
Jersey
Lowenstein, Michael W. (1997) The Customer Loyalty Pyramid. Available from
http://www.questia.com/PM.qst?a=o&d=23383321 [May 19th 2011]
Olson, Jerry., Peter, Paul., 2001, Consumer Behavior and Marketing Strategy, 6th edition,
McGraw Hill, N.America
Schiffman, Leon., Kanuk, Leslie., 2001, Consumer Behavior, 6th edition, Prentice Hall, New
Jersey
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