Network effects of loyalty programs on store loyalty--澳洲Assignment代写

澳洲Assignment代写范文:“Network effects of loyalty programs on store loyalty”，这篇论文主要描述的是通过数据分析和研究表明，一个具有用户忠诚度的药房是很难被模仿和更换的，通过线下和网络的营销的方式来增加用户对于药房的忠诚度，能够为药房创造出一个具有价值的竞争优势。

ABSTRACT

The research was designed to explore the importance of loyalty programs in today′s competitive community pharmacy environment. Although this marketing tool is used to promote a loyal behavior of the customer, the results show a weak relationship between program loyalty and store (pharmacy) loyalty. This indicates that in order to create a successful competitive advantage for the pharmacy a loyalty program needs to be of value, rare, not perfectly imitated or easily replaced. When analyzing the value perception construct, the results indicated the importance of the psychological benefits of belonging to a loyalty program. When the loyalty program is implemented, not as a resource strategy, but as a “me too” strategy it is more likely not to meet marketing expectations and the expected benefits. Additionally, the authors analyze the effects of household characteristics on program perceived value.

Introduction

One of the most remarkable trends over the two decade in marketing has been a change of focus form single transactions to relationships (Gr?nroos, 1994; Hennig-Thurau & Hansen, 2000). The 60’s predominated marketing-mix concept and the 4P′s model, with the development of industrial marketing and services marketing, has given rise to a need for an alternative approach to the marketing concept (Aijo, 1996; Gr?nroos, 1996; Gummesson, 1987), that better reflected the relationships that were incorporated in the marketing-mix (Waterschoot & Bulte, 1992). Gr?nroos (1994, p. 9), extending the initial definition of Leonard Berry in 1983, defines the goal of relationship marketing (RM) as “establish, maintain, and enhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met.” The most successful buyer-seller relationships are characterized by mutual trust and sharing of information and continuous display of commitment and satisfactory performance of the partner′s respective role (Barnes, 1994). The tangible benefits of the adoption of RM strategies were first published in 1990 by Dawkins and Reichheld. They stated that a higher rate of retention corresponds to a higher profit for the company (Dawkins & Reichheld, 1990). These effects are explained by the fact that a company that targets the retention rate is supported by a solid base of repeat sales (Dawkins & Reichheld, 1990), by the positive word-of-mouth (Bowen & Shoemaker, 1998) and by the fact that a loyal costumer tends to spend more than an new one (Bhattacharya & Bolton, 2000). Loyalty is now seen as one of the most important drivers of success in a business (Reichheld, 1996) making it the core goal of any strategic planning in marketing (Dick & Basu, 1994; Diller, 2000). As a result the last decade has seen the blossoming of the loyalty programs (LP) market, especially in retail organizations (Sharp & Sharp, 1997). LP are defined as a integrated system of marketing actions that reward and, therefore, enhance the loyal behavior of the costumer through several economic, psychological and sociological mechanisms (Leenheer, van Heerde, Bijmolt, & Smidts, 2007). Despite the wide interest LP, few studies are devoted to the potential impacts of the LP on actual consumer behavior, and the research provides contradictory outcomes (Meyer-Waarden, 2007).

Conceptual Model and Hypotheses of Study

The launch of any LP has as main objective to strengthen the relationship between the focal store and its customers, in order to differentiate it and to provide new approaches  to address an increasingly competitive market. In the case of network LPs, where the management of the LP is made by a specific company, but the ownership of the LP is distributed through several firms, it is much easier to established the firm’s critical size, such as number of memberships, but this also means that the firm as limited influence on his LP strategy (Reinartz, 2006). And, recognizing that an LP does entail costs, including financial, labor and psychological capital (Uncles, Dowling, & Hammond, 2003), the authors studied antecedents and consequences of network LPs when applied to community pharmacy business. The conceptual model that forms the basis of the study is presented in figure 1. Based on the bibliographic research, six hypotheses were generated, focusing on the relationships between value perception, program satisfaction, program loyalty and store (pharmacy) loyalty. Additionally, the authors analyze the effects of household characteristics on program perceived value.

Figure 1 - Conceptual Model

The effects of value perception on loyalty

According to O'Brien and Jones (1995) a LP that effectively promotes store loyalty should combine five elements that, when together, determine the value of the program: (1) cash value of redemption rewards, (2) redemption choice, (3) aspirational value, (4) perceived likelihood of achieving rewards, and (4) the scheme’s ease of use. These perceived benefits may help us understand why customers join LP and, as consequence, how this benefits drive loyalty (Mimouni-Chaabane & Volle, 2010).

H1c: Value perception positively influences store loyalty.

The mediator effect of satisfaction in the value/loyalty relationship

Satisfied customers tend to concentrate their purchases within the same company more so than those customers who are not satisfied. As a result satisfaction is an important determinant of loyalty (Yang & Peterson, 2004).

H2a: Program satisfaction will have a positive effect on store loyalty.

H2b: Program loyalty will be positively influenced by program satisfaction.

The effects of loyalty programs on loyalty

As referred before, empirical evidence available on the effectiveness of the LP is limited and contradictory (Lewis, 2004; M?gi, 2003; Meyer-Waarden, 2007). Some researchers do express their doubts about the benefits of LP and suggest that, in a competitive market, good programs are imitated. Once the program has become generic across competing firms there would be a return to the initial situation (Meyer-Waarden, 2007; Yi & Jeon, 2003). Despite the empirical evidence, it seems intuitive that LP members concentrate their purchases on a particular company and are less likely to visit competitors. In the case of network LPs, this relationship between program loyalty and store loyalty may not be observed since the member can distribute their purchases through several firms, and still continue to gather benefits from the LP.

H3: Store loyalty will be positively influenced by program loyalty.

The effects of household characteristics on program perceived value

Not all customers associate the same benefits to a certain LP (Allaway, Gooner, Berkowitz, & Davis, 2006; Mimouni-Chaabane & Volle, 2010), making it plausible that any effect of the LP in the costumer behavior will be moderated by some member’s characteristics (M?gi, 2003). Because it is difficult to suggest what individual factors are important, or to determine the direction of their impact, the authors did not derive a specific hypotheses related to this assumption but base this on the research related to individual differences as an exploratory character.

H4: The household characteristics influence the program perceived value.

Method

A survey was carried out in a community pharmacy in Vila Verde, a town in the north of Portugal. It is also noted that while community pharmacies in Portugal are represented by one major institution they do compete individually in their market environment. The network LP in this environment is analyzed and results shared by several community pharmacies who then gather the combined benefits of their collective effort.  The data for this study was collected by using self-administered questionnaires distributed using convenience sample technique. The population of interest for this study was defined as consumers of a focal community pharmacy who were member of the LP. The survey instrument used a comprehensive set of 17 questions that were directly tied to the four constructs of the study. The interval scale was anchored using a Likert type measurement approach. Five response categories with properties labeling for the scale end points form (1) which denotes “strongly disagree”, and (5) for “strongly agree”. Following the conduction of a pretest to verify the suitability of the terminology used as well as clarity of the instructions and scales, to more questions were added to characterize the type of experience the member as with the LP (reward redemption and membership time length). A total of 72 surveys were validated (See table 1).

Table 1. Seventeen questions of survey and statistical results

Measures Mean α Sources of items of the constructs

Value perception of the LP

It is very easy de redeem rewards.

The selection of products in the redeem catalog is good.

The products available for redemption are of good cash value.  0,73 Sunny Hu, Huang, and Chen (2010)

3,60

3,55

3,46

Program Satisfaction

On general, the evaluation of the LP is good.

I made a good choice when I decided to join this program.

The rewards I receive, being a member of the LP, agree with what I expected.

Overall I’m satisfied with the LP. 0,93 Omar, Musa, and Nazri (2007)

3,94

4,18

3,59

3,81

Program Loyalty

I like the proposed LP more so than other programs.

I have a strong preference for the proposed LP.

I would recommend the proposed LP to others.  0,88 Sunny Hu et al. (2010)

3,60

3,83

4,04

Store Loyalty

Attitudinal aspects

I have a strong preference for the proposed pharmacy.

I like this proposed

pharmacy more so than others.

I give prior consideration to this pharmacy when shopping.

Price insensitivity

I would still continued to be a customer of this pharmacy even if it were raise prices slightly.

Word-of-Mouth

I would highly recommend this pharmacy to my friends and family.

I would say positive things about this pharmacy to other people.

Commitment to the firm

I would stand by this pharmacy if its service has dropped in standard on rare occasions.  0,85 Sunny Hu et al. (2010)

Data Profile

Customer’s sample (N=72) included 53 (76,8%) females and 16 (23,2%) males and more than 50% of the respondents aged between 24 and 44 years old. Most of the individuals had a household of three people (34,7%) and most of them also didn’t have infants in their family household (58,3%). Table 2 provides a general result of costumers sample profile.

Another important statistic was the length of experience with the LP. 70,5% of the respondents claimed that they were members for more than one year, however only 51,4% of them had already redeem points.

Sex

Male (23,2%)

Female (76,8%)

Age

18-24 years old (12,5%)

25-34 years old (31,9%)

45-54 years old (6,9%)

55-64 years old (13,9%)

+65 years old (11,1%)

Marital Status

Single (29,2%)

Married (59,7%)

Divorced (8,3%)

Widower (1,4%)

Family Househol

1 (11,1%)

2 (27,8%)

3 (34,7%)

4 (18,1%)

5 (2,8%)

+5 (2,8%)

Infants

Yes (40,3%)

No (58,3%)

Results

In order to explore the various relationships proposed in the conceptual model, the Pearson's correlation coefficients (R) and the determination coefficient (R2) were calculated between the latent constructs. The Pearson′s correlations between the independent variable perceived value and dependent variables program satisfaction, program loyalty and store loyalty were analyzed. This analysis demonstrated two strong correlations: between perceived value and program satisfaction (r = 0.74, p <0.01) and between perceived value and program loyalty (r = 0.64, p <0.01). Analysis between the variable perceived value and store loyalty resulted in a moderate correlation (r = 0.419, p <0.01). The extracted correlation from the analysis of the independent variable satisfaction and the dependent variable program loyalty has shown to be very strong (r = 0.82, p <0.01). Regarding the program satisfaction variable and the variable store loyalty a moderate correlation (r = 0.496, p <0.01) was found. Also moderate (r = 0.493, p <0.01) is the correlation between the independent variable program loyalty and store loyalty.

To assess whether the program perceived value is dependent on some characteristics of the household, we resorted to the use of the chi-square test (X2) implemented in the software of statistical analysis SPSS Statistics (v.21 software, IBM SPSS, Chicago, IL). The inferential statistical analysis does suggest that the program perceived value is independent of the number of people in the household (X2 = 71.7, p = 0.421, N = 70), the existence of infants in the household (X2 = 19.1, p = 0.163, N = 71) and age (X2 = 64.5, p = 0.663, N = 71). It is also possible to claim that the program perceived value construct is dependent on the marital status of the member of the program (X2 = 70.6, p = 0.004, N = 71). See table 3 for results of the hypotheses tested.

Table 3. Results of the Hypotheses Tested

Hypothesis Path R R2 p-value Results

H1a: Perceived Value –Program Loyalty 0,635 0,403 < 0,01 Supported

H1b: Perceived Value – Program Satisfaction 0,749 0,548 < 0,01 Supported

H1c: Perceived Value – Store Loyalty 0,419 0,175 < 0,01 Supported

H2a: Program Satisfaction – Store Loyalty 0,496 0,246 < 0,01 Supported

H2b: Program Satisfaction – Program Loyalty 0,822 0,676 < 0,01 Supported

H3: Program Loyalty – Store Loyalty 0,493 0,243 < 0,01 Supported

Discussion

One of the primary goals of this study was the evaluation of a network LP from the perspective of the pharmacy costumer. The results provide a more focused and better understanding of the process of developing an effective LP that is able to satisfy their members (consumers) and as a consequence of that satisfaction create a loyalty to the pharmacy. The incorporation of program perceived value and program satisfaction permitted the authors to test the importance of these constructs on the formation of loyalty towards the store program.  As highlighted in table 2, the study determined a strong empirical support for several of the hypothesis (H1a, H1b and H2b). The study also determined there was empirical evidence supporting that members of a network LP who recognize value to the program are satisfied with it and, as a result, engage in behaviors that strengthen their relationship with the community pharmacy. These results are in agreement with previous studies (Sunny Hu et al., 2010; Yi & Jeon, 2003). It should, however, be noted that, by splitting the path between program perceived value and store loyalty in two ways it was determined that the positive influence that perceived value has upon store loyalty is stronger if a loyalty program exists. This result is in agreement with previous studies (Sunny Hu et al., 2010; Yi & Jeon, 2003) that explain the mediator effect of program loyalty on store loyalty. However, unlike the outcome of these previous studies that found no significant correlation between program perceived value and store loyalty the authors established a positive correlation, although moderate, between the two constructs.

The results indicate that the value of the loyalty program is perceived by consumers and that these consumers are satisfied with it. It should be noted, however, that many of the program members, while claiming to be satisfied with the loyalty program never actually collected (enjoyed) the tangible benefits which were the possibility of exchanging loyalty points for products. Possibly, the psychological benefits of belonging to the LP and accumulating points have an important role in the construction of their perceptions of value and consumer satisfaction levels, as suggested by Dowling and Uncles (1997) even when these same consumers do not actually participate in the tangible benefits of the program. In line with this reasoning are the results of Arbore and Estes (2013) who explored the role of psychological benefits, and how the LP through the possibility of rewarding its members with prizes or discounts can influence their perceived status.

The assumptions of the authors that the program’s perceived value would vary according to age and depending on the type of household were not confirmed. This result contradicts the results of previous studies (Meyer-Waarden & Benavent, 2003) that reported the possession and use of LP is dependent on the different life cycles and that are function, for example, of age and profession.

Conclusion

As Barney (1991) stated in his work, in order to any strategic resource to become a sustained competitive advantage it has to be valuable, rare, imperfectly imitable and non-substitutable. The weak correlation between program loyalty and store loyalty could be explained by the fact that this network LP is not exclusive property of the focal pharmacy. This implies that there may be members who are only loyal to the program (not the specific store) and will dividing their purchases among the several pharmacies within the same loyalty program. Regardless of type and goal to be achieved with the LP  any program should have as its strategic objective to contribute to increase the operating profit of the company. This finding may have consequences for companies that use a franchise system where a central loyalty program could increase overall firm profits but not promote a unique loyalty/profitability to a specific store. The findings also indicate that as more firms come under competitive pressure to adopt LPs as a marketing tool without a clearly developed strategy such programs may not generate a competitive advantage for the company.

Research limitations

In consideration of limitations or generalizations of research outcomes two factors should be considered. The first relates to the study’s external validity as the respondents were selected by convenience so may not be an accurate representation of the population of community pharmacy LP members. A second weakness the endogenous nature of LP meaning that already loyal customers have a higher tendency for engaging in a LP. This phenomenon may artificially enhance the effects of program loyalty on store loyalty. 

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