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Customers’ Perceptions and Preferences of Loyalty Programs within the Clothing Industry

Written by A. Faßbender

Paper category

Bachelor Thesis

Subject

Business Administration>Communication & Media

Year

2018

Abstract

Bachelor Thesis: Loyalty The term loyalty program has indicated its purpose, and the literature review shows that the main goal of customer clubs is to inspire loyalty to the company by building relationships with customers to retain customers. Although the subject of loyalty is essential to research in this field, the literature still lacks its coverage.117 The theoretical framework proposes four concepts to study the reasons why customers become and remain loyal to the company. They are "(...) behavioral loyalty, attitude loyalty, customer satisfaction, and switching costs."118 Starting from behavioral loyalty, some people claim that loyalty can be viewed as a concept based on the actual purchase behavior of customers 119 as "( .. .) It is defined as a non-random purchase expressed by a certain decision-making unit over a period of time.” 120 In contrast, it also claims that loyalty is manifested in an attitude through emotional attachment to the company. Research shows that behavioral loyalty and attitude loyalty must complement each other, because neither of them leads to overall strong loyalty 121. There are two opposing lines of argument regarding customer satisfaction related to loyalty. On the one hand, compared with customer loyalty, satisfaction is considered to be an unreliable way to measure the likelihood of customers repeat purchases122. On the other hand, Griffin described a study in which it is assumed that there is a positive correlation between satisfaction and purchasing behavior 123 and Gustafsson et al. Explain the advantages of satisfaction over loyalty. Loyalty can be purchased but satisfaction must be obtained.124 The fourth and final concept of customer loyalty is based on the switching costs incurred to customers. The baron waited. When they suggested that research should be shifted from loyalty to the opposite represented by switching behavior, it shows that there is a research gap, and the purpose is not to maximize loyalty but to minimize switching. 125 This approach is followed because other researchers support the importance of switching costs as an initiator for repeated purchases. 126 One aspect of the criticism of the field of customer club loyalty research is that these clubs may not build customer’s perception of the company or brand. Loyalty, and only builds loyalty to the loyalty program itself127. Therefore, the program loyalty that "(...) is conceptualized as having a high relative attitude towards loyalty programs" 128 is distinguished from the corporate loyalty that implies the motivation of the customer to establish a relationship with the company 129. 3 Methodology 3.1 Research design and apparel industry case In order to obtain valuable data on selected topics and research questions, quantitative research was carried out. This was chosen consciously because it is considered the best service method for the purpose of this research, because it can reach a wide range of participants and collect data that can be used for statistical analysis of selected variables. In addition, in order to collect reliable and scalable results, we chose to use the apparel industry as a case study in the field of customer club research to conduct a questionnaire survey. This method of using cases as a control variable in the questionnaire aims to prevent misunderstandings and ensure that customers have the attributes of a customer club in their minds when answering questions. The reason for choosing the clothing industry consciously is that the largest and increasing share of customer club memberships can be attributed to the retail industry, including fashion retailers151. Therefore, the clothing industry as a case is suitable to serve the goal of unifying participant indications, thereby reducing misunderstandings and biased results. 3.2 Target group, sample size and distribution When determining the target group of the questionnaire, it must be decided whether to focus only on the members of the client club or integrate non-members. Based on the argument that the loyalty program is mainly designed to retain existing customers, because it is less cost-intensive than acquiring new customers152, but it is also partly designed to attract potential new customers153, so investigating the attitudes of non-customers It's also very interesting. Members who see the research field as critics can reveal the possibilities for improvement. Therefore, both members and non-members of the client club were consulted as the selected target group for the study. Regarding the number of responses that should be provided in the questionnaire to make it valuable, Butscher (1998) believes that 250 participants are necessary for reliable results154. Dwulf et al. A study conducted by (2003) was considered to be reliable with 243 analytical questionnaires155, while Kreis and Mafael (2014) conducted a similar study on 214 participants and stated that this is a reliable value of 156. Therefore, this number is set to a minimum, so that the results become useful and generalizable to the greatest extent. Therefore, the target group did not exclude anyone from the beginning, and the sample size was relatively large compared to qualitative research. Read Less