logo

Impact of Customer Loyalty Programs on Store Loyalty - Doc

   

Added on  2020-07-22

136 Pages49447 Words35 Views
DISSERTATION(Measuring impact of customer loyalty programs & Mediating factors onstore loyalty: The beauty and health retailing stores in Hong Kong)

Table of ContentsINTRODUCTION...........................................................................................................................11 1.1 Background...................................................................................................................11.1.1 Hong Kong Special Administrative Region.........................................................21.1.2 Culture in Hong Kong..........................................................................................31.1.3 Context of Beauty & Health Care Products.........................................................41.1.4 Distribution Channels in Hong Kong..................................................................51.2 Justification of Proposed Research..................................................................................61.2.1 Importance of Customer Loyalty Programs in Beauty & Health Care Productsretailing context in Hong Kong.....................................................................................71.2.2 Price Sensitivity in Chinese Society....................................................................81.3 Aim & Objectives............................................................................................................91.4 Research Questions.......................................................................................................121.5 Intended Research Methodology...................................................................................141.6 Outline of Dissertation..................................................................................................172.0 LITERATURE REVIEW........................................................................................................182.1 STORE LOYALTY.......................................................................................................182.1.1 Behavioural Action............................................................................................222.1.2 Word-of-mouth .................................................................................................232.1.3 Commitment ......................................................................................................252.2 CUSTOMER LOYALTY PROGRAMMES................................................................272.2.1 General History..................................................................................................282.2.2 Hard Attributes ..................................................................................................302.2.3 Soft Attributes ...................................................................................................322.2.4 Impacts of Customer Loyalty Programmes on Store Loyalty............................332.3 COMMUNICATIONS WITH CUSTOMERS..............................................................372.3.1 Illustration of Communication with Customers.................................................372.3.2 Association with Store Loyalty..........................................................................382.4 VISUAL MERCHANDISING.....................................................................................392.4.1 Content of Visual Merchandising......................................................................392.4.2 Connection to Communication with Customers................................................40

2.5 Development of Hypotheses..........................................................................................412.6 Development of Research Model..................................................................................432.6.1 Review of the Parental Frameworks..................................................................442.6.2 Proposed Model in Current Study......................................................................45CHAPTER 3: RESEARCH METHODOLOGY...........................................................................483.1 Introduction...................................................................................................................483.2 Research methodology..................................................................................................493.3 Research design.............................................................................................................503.3.1 Type of research design.....................................................................................513.3.2 Research methods..............................................................................................523.3.3 Survey research..................................................................................................523.3.4 Sampling............................................................................................................533.3.5 Questionnaire.....................................................................................................543.3.6 Product Categories.............................................................................................543.3.7 Research Framework..........................................................................................543.4 Data Collection..............................................................................................................553.4.1 Demographic Information .................................................................................573.4.2 Store Loyalty......................................................................................................593.4.3 Customer Loyalty Program................................................................................613.4.4 Price Sensitivity.................................................................................................623.4.5 Communication with Customer.........................................................................633.4.6 Visual Merchandisin..........................................................................................633.4.7 Price Image........................................................................................................643.4.8 Location.............................................................................................................643.5 Measures........................................................................................................................653.7 Validity..........................................................................................................................663.8 Ethical considerations....................................................................................................673.9 Significance and Limitation of research design............................................................673.10 Conclusion...................................................................................................................67CHAPTER 4: DATA ANALYSIS................................................................................................694.1 Introduction...................................................................................................................69

4.2 Descriptive analyses......................................................................................................694.3 Frequencies tables.........................................................................................................724.4 Cronbach's alpha test.....................................................................................................864.5 Chi square test and cross tabulation..............................................................................874.6 Mediation and moderation analayses through process macro.......................................904.7 Summary of hypotheses results.....................................................................................93CHAPTER 5: CONCLUSION AND RECOMMENDATIONS ..................................................955.1 Introduction...................................................................................................................955.2 Findings.........................................................................................................................955.3 Decision stage................................................................................................................985.4 Summary of findings...................................................................................................1025.5 Recommendations.......................................................................................................1045.6 Limitation and direction for future research................................................................1045.7 Summary and conclusion............................................................................................105REFERENCES............................................................................................................................106APPENDIX..................................................................................................................................125

INTRODUCTIONIn the current research work, the connection between the customer loyalty program andthe store loyalty in the local beauty and health retailing industry was investigated so as to providethe hints for the practitioners in the field of having a better understanding of their target groupsas well as the effectiveness of the customer loyalty program delivered. The related study alsoprovided the recommendation for the managers of the related industry in the conducting of theloyalty program. Furthermore, the customers could be benefited from the related study by theenhanced fulfilment to their expectation. It was hoped that the current study could provideguidance for the owners of the retail industry of beauty and healthcare products in facing thecomplicity and challenge of the sector. Therefore, for the sake of having an improved illustration to the related content, thecurrent chapter was divided into six sections, namely, Background, Justification of ProposedResearch, Aim & Objectives, Research Questions, Intended Research Methodology, and Outlineof , so as to highlight the intended approach in conducting the current study along with the aimand objectives in performing the related research investigation.11.1 BackgroundBeauty and health care products were special in locals because of the intensifiedcompetition, while a wide range of parties was involved in the sales channels. Most of themdedicated for the function of marketing and sales (Australian Trade Commission, 2014), whilethe lack of local manufactures heated the competition due to the similarity of functions(Australian Trade Commission, 2014). To stand out, all distributors encouraged the sales with awide range of customer retaining campaign (Oliaee, et al., 2016), while the dynamics of themarket was unpredictable due to the interference of the resultant effects. Consequently, becauseof the complexity of the background related to the local beauty and health care products retailingindustry, the related illustration was divided into four aspects, while they were presented in thefollowing four subsections, namely, Hong Kong Special Administrative Region, Culture in HongKong, Context of Beauty and Health Care Products and Distribution Channels in Hong Kongrespectively.

1.1.1 Hong Kong Special Administrative RegionHong Kong was in Southern China and the New Territories of Hong Kong wasgeographically linked to the Mainland of China (Floyd, 1998). Hong Kong was a part of theQing China before the mid-19th century (Floyd, 1998). Great Britain occupied Hong Kong Islandand Kowloon Peninsular of Hong Kong through the Treaty of Nanking in the First Opium Warand the Second Convention of Peking respectively (Floyd, 1998). Hong Kong was officiallyBritish colony when Qing China agreed to lease New Territories of Hong Kong to Great Britainin 1898 for 99 years (Floyd, 1998).Great Britain failed to defend Hong Kong from Japanese invasion in the second worldwar and she regained the sovereignty in 1945 (Floyd, 1998). In 1984, Great Britain agreed toreturn Hong Kong to the People's Republic of China under the principle of “One Country, TwoSystems” in 1997 (Floyd, 1998). Hong Kong would be transformed as a Special AdministrativeRegion of the People’s Republic of China while Hong Kong remained to be a capitalisteconomy, a common-law jurisdiction and highly independent from Mainland China for 50 years(Floyd, 1998). To be specific, the citizens of Hong Kong could remain their living styles and thejudiciary, legislative and executive systems remained independent from the People’s Republic ofChina (Floyd, 1998). Hong Kong, with a deep natural harbor that flourished cargo shipments, became a leadingfinancial center. There were 7.24 million residents living in less than 1100 sq km (Hong KongFact Sheet, 2015). Therefore, Hong Kong was ranked the 4th densely populated area on earth.Chinese was the majority ethnic group in Hong Kong. For every 1165 female, there was 1000male (Hong Kong Fact Sheet, 2015). Therefore, Hong Kong was an attractive location forforeign branded beauty products as the population skewed to female (Australian TradeCommission, 2014). Meanwhile, the median age of Hong Kong rose to 42.8 in 2014 which madeit an attractive location for foreign branded health care products as the demand for health careproducts rose by an increase of age (Australian Trade Commission, 2014; Hong Kong FactSheet, 2015). As a result, this study targeted to inform marketers with updated insightinformation on beauty and health care products retailing in Hong Kong market.

1.1.2 Culture in Hong KongIn Kroeber and Parsons (1958, p.583), the word culture was described as “......Transmitted and created content and patterns of values, ideas, and other symbolic-meaningfulsystems as factors in the shaping of human behavior and the artifacts produced throughbehaviour.” Frey (2005, p.1) described the effect of culture values as “Learned, relativelyenduring, emotionally charged, epistemologically grounded and represented moralconceptualizations that assist us in making judgments and in preparing us to act. In other words,the priorities we set and the choices we make are significantly based on the (cultural) values wehold.” Traditional Chinese culture/Confucianism dominated Hong Kong before mid-19th centurytill the invasion of Great Britain (Siu, et al., 2003). Chinese values emphasised the importance offamily unity over individualism (Abelmann, 1997). Binding a tight family required all membersto be polite and to show respect (Abelmann, 1997). Therefore, Chinese values emphasised onpersonal courtesy and “face-giving” (Siu, et al., 2003). Although, Hong Kong had fallen as acolony of Great Britain and it was said that western believes of individualism impacted the livingstyle of the citizen in Hong Kong (De Mooij, 2005); apart from Low Uncertainty Avoidance,Hong Kong Citizen followed Confucianism in most of the area (please see table 1). Confucianism emphasised on “Wulun”, a very strong hierarchy was formed betweenfather and son (Siu, et al., 2003). Father was the leader of the family and he inherited the right tomake the final decision (Siu, et al., 2003). Therefore, Hong Kong was found Masculinity andLarge Power Distance (Hofstede & Hofstede, 1997). Hong Kong was found collectivism becauseChinese emphasised the importance of family unity over individualism (Abelmann, 1997; DeMooij, 2005; Hofstede, 1980). Confucianism believed that hard working to achieve significantfuture rewards was a virtue; however, respecting “Wulun” hierarchy was equally important (Siu,et al., 2003). As a result, Confucianism consisted the principles of both sides (Siu, et al., 2003;Hofstede & Hofstede, 1997). Lastly, Low Uncertainty Avoidance could be attributed to thewestern culture of entrepreneurship. As a result, Hong Kong culture was willing to try newproducts and to sacrifice short-term interests so as to achieve long-term rewards (Siu, et al.,2003; Hofstede & Hofstede, 1997). Therefore, this study targeted to investigate the impact ofcustomer loyalty program had on store loyalty in Hong Kong.

Table 1: Culture in Hong Kong (Hofstede, 198; Hofstede & Hofstede, 1997)1.1.3 Context of Beauty & Health Care ProductsAfter the reviewing of Hong Kong and Culture in Hong Kong, the subjects of study,namely, beauty and health products were defined so as to give a common ground for thediscussion. Beauty products shared the similar meaning with cosmetics, skin-care and toiletryproducts, while it was defined as the externally applied preparations for skin, nails, hair, lips, andeyes, etc. so as to change or modify the appearance and personal hygiene in enhancing theoverall beauty (The Columbia Encyclopaedia, 2013; Barel, et al., 2001). Generally, beautyrelated products were targeting the female segment majorly as using beauty products wereviewed as feminine (Parry, 2005; Wood, 2010). On the other hand, health care products weredefined as certain remedies with the objectives of treating or preventing the illness so as tomaintain a good condition of overall health instead of using the prescribed treatments orintensive care (Answers Cloud, 2016). In general, minerals, vitamins, herbal remedies,

End of preview

Want to access all the pages? Upload your documents or become a member.