Impact of Brand Loyalty and Consumer Satisfaction on Consumer Purchase Decision in Retail Industry

This research analyzes the impact of brand loyalty and consumer satisfaction on consumer purchase decision in retail industry. The study is conducted in the context of the retail industry in Saudi Arabia. The research aims to evaluate the impact of brand loyalty and consumer satisfaction on consumer purchase decision making in the retail industry. The research questions are developed to address the impact of brand loyalty and consumer satisfaction on consumer purchase decision making in the retail industry. The research objectives are to analyze the brand loyalty impact on consumer purchase decision, evaluate the impact of consumer satisfaction factors on consumer purchase decision making, analyze the role of retail brand performance through enhancing consumer satisfaction and loyalty, and investigate the function of brand efficiency in improving consumers purchase intention.

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Impact of Brand Loyalty and Consumer Satisfaction on Consumer Purchase
Decision in Retail Industry
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Acknowledgement
Conducting this research has been one of the most enriching experiences of my life. The
contribution of this research to enhance my knowledge base and analytical skill has been
paramount. It gave me the opportunity to face challenges in the process and overcome
them. This would not have been possible without the valuable guidance of my professors,
peers and all the people who have contributed to this enriching experience. I would like
to take this opportunity to thank my supervisor Prof. Cormac Austin for the constant
guidance and support provided to me during the process of this research. It would not be
justified if I did not thank my academic guides for their important and valuable assistance
and encouragement throughout the research process. I would also like to thank my friends
who had provided me with help and encouragement for collecting primary data and
valuable resources. Finally, I would like to thank the consumers from the retail industry
who have participated in the research survey and provided with valuable inputs into the
subject. The support of all these people has been inspiring and enlightening throughout
the process of research in the subject.
Heartfelt thanks and warmest wishes,
Yours Sincerely,
PLEASE FILL
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Abstract
Brand loyalty is defined as the preference of a buyer for a particular brand of product
irrespective of various other factors like product, quality, quantity and others.
Establishing brand loyalty is one of the main objectives of any business organization as it
significantly helps the company to overcome market competition. Customer satisfaction
is defined as the state of the customer when his requirements are met by the products
provided by the seller in terms of quality, price and quantity. However, on a larger scale,
customer satisfaction can be defined as the fulfilling of the requirements of the customer
base within a target region even during high competition in the market. Purchase decision
of a consumer is defined as the process by which the customer decides whether to buy or
not to buy a product from a brand. The focus of this research is the retail industry in the
country of Saudi Arabia and throughout the research the performance of the retail
industry in Saudi Arabia and the related factors like brand loyalty and customer
satisfaction has been analyzed and discussed.
Based on results of the study, it has been gathered that both brand loyalty and customer
satisfaction play major role in determining the consumer purchasing decision in Saudi
Arabia retail industry. However, the study has been conducted on a very small sample
size and does not reflect the true situation in the field of research. The results deduced
from the data can only be used to set a trend of consumer purchasing behaviour in the
country with the limitation that it may not be true for all consumers in the country.
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Table of Contents
Chapter 1: Introduction, Research Aim, Objectives and Research Questions................................5
1.1 Background............................................................................................................................5
1.2 Research Focus......................................................................................................................7
1.3 Research Aim and Research Questions.................................................................................8
1.4 Research Objectives...............................................................................................................8
1.5 Outline of Structure...............................................................................................................8
Chapter 2: Literature Review.........................................................................................................10
2.1 Introduction..........................................................................................................................10
2.2 Brand Loyalty......................................................................................................................10
2.3 Customer Satisfaction..........................................................................................................13
2.4 Purchase Decision................................................................................................................14
2.5 Retail Industry Analysis in Saudi Arabia Context...............................................................15
2.6 Conceptual Framework........................................................................................................18
2.7 Discussion of Findings from Literature on Saudi Arabia Context......................................19
2.8 Conclusion...........................................................................................................................26
Chapter 3: Research Design and Methodology.............................................................................27
3.1 Introduction..........................................................................................................................27
3.2 Method Outline....................................................................................................................27
3.3 Research Outline..................................................................................................................28
3.4 Research Philosophy............................................................................................................28
3.5 Research Approach..............................................................................................................29
3.6 Data Collection and Analysis..............................................................................................29
3.7 Sampling..............................................................................................................................30
3.8 Ethical Considerations.........................................................................................................30
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Chapter 4: Findings / Results.........................................................................................................31
4.1 Quantitative Data Analysis..................................................................................................31
4.2 Qualitative Data Analysis....................................................................................................32
Chapter 5: Analysis and Discussion of Findings...........................................................................33
5.1 Analysis of Quantitative Data..............................................................................................33
5.2 Analysis of Qualitative Data................................................................................................42
5.3 Detailed Discussion Based on the Findings.........................................................................44
Chapter 6: Conclusion and Recommendations..............................................................................50
6.1 Conclusion...........................................................................................................................50
6.2 Recommendations................................................................................................................60
6.3 Research Limitations...........................................................................................................61
6.4 Linking with Objectives......................................................................................................61
6.5 Future Scope of Research....................................................................................................62
References......................................................................................................................................64
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Chapter 1: Introduction, Research Aim, Objectives and Research
Questions
1.1 Background
Brand loyalty and customer satisfaction are considered to be two major factors
behind the commercial success of a business organization especially in the retail industry.
Brand loyalty is defined as the affinity of a customer towards a particular brand of
product such that the customer buys products of that brand only although there are other
similar brands present in the market. Thus, once the company is able to launch its brand
successfully, it expects to gain brand loyalty from the customers so that it is able to build
up a strong customer base (Aaker 2011). In order to develop brand loyalty, the company
needs to provide the customers with the best quality of products in the market within a
limited price range. While some of the customers prefer best qualities of products
irrespective of price, some other customers consider the price range of the products
before purchase decision. Thus, the company that wants to gain brand loyalty for the
customers need to consider both these factors before releasing their products in the
market.
On the other hand, customer satisfaction is defined as the situation when the
customer is happy after buying a product of his choice from a retail store such that he
purchases the same product of the same brand again and again. Thus, in order to gain
popularity, a business organization should also consider gaining customer satisfaction as
it plays a vital role in the overall business of the company (Berry 2007). With high value
of customer satisfaction, the sales of the company / retail store will continue to increase
and the company will be in a much better place in the competitive environment in the
market.
Purchase decision is defined as the consideration made by the customer regarding
whether he will buy a particular product of a particular brand from a particular retail store
or not. There are several factors that play major roles in the determination of the purchase
decision of a customer.

Brand efficiency of a product is directly related to brand loyalty and customer
satisfaction and can be defined as the ratio of brand output and brand input. In other
words, brand efficiency is the amount of brand output that is generated against the inputs
made towards the development of the brand. Brand loyalty of a customer can only be
developed when the company is able to generate high brand efficiency. In order to
increase brand efficiency, it is important for the company to control spending and also
generate sufficient amount of revenue through sales. Now, for achieving high sales and
earn significant profit margin, the company must ensure the customer base is loyal
towards the brand and satisfied regarding the products they receive. Majority of
customers look to ensure they receive high value for money in terms of product quality,
quantity and service (Apéria and Georgson 2011). Some researchers have introduced the
concept of brand management that helps a company to grow brand efficiency and brand
loyalty of the customer. Some of common brand management techniques deployed by the
companies include advertising campaigns, distribution of free samples, quality
management of the products before dispatch and others. Generally, the aim is to ensure
the customers feel the qualities and prices of the products are reasonable as well as value
for money. With time, as brand efficiency increases, brand loyalty among the customers
also increases that in turn influences the purchase decision of the customers (Dick and
Basu 2007). Some researchers pointed out the example of some brands like Apple and
have stated that once the company has earned very high brand value and strong brand
loyalty among the customers, they are free to increase products costs and change other
factors and still not risk losing customers. This is because their brand values are so strong
that the customers will always have top preference towards purchasing products only
from that brand irrespective of the presence of alternative cheap products from other
brands.
Some authors have expressed their opinion that in order to gain brand success in
terms of finances, it is important for the company to develop a good brand image and
brand awareness. Brand image refers to the perception of a particular brand on the eyes of
customers. Some of the key success factors behind developing a brand image is an
attractive brand symbol design, a suitable name that reflects the ambition and nature of
the company, attractive products and others. On the other hand, brand awareness refers to
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the idea of the people regarding what products can be purchased from a particular brand
(Corstjens and Lal, 2008). For instance, a customer with low brand awareness will not
expect smartphones from “Apple” brand. The researchers have emphasized that the most
popular and successful brands will always look to ensure fulfilling the requirements of
the customer and make their business customer centric. The advantage of this approach is
that it enables the companies to gain brand loyalty and satisfaction of the customers.
It is known that customers are massively important to determine the success of
any business in the global context and studies state that the roles of customers in business
have always been overemphasized. As per various studies, the purchasing behaviour of
the customers help the company in gaining high profit margins, competitive advantage in
the market as well as considerable economic growth in the business. Previous studies
have left a gap on the influence of customer satisfaction on both trust, and loyalty as
mediator variables with the end result of causing a repurchase by customers (Han and
Hyun 2015). There is a growing recognition that customers of any business organization
have a life cycle; thus should be acquired, retained, and climb a value ladder from first
time customers to partner status. According to the studies, the customers are key
predecessors for sales, business’ growth and profitability and hence, the businesses
depend considerably on their purchasing behaviour but at the same time, these companies
need to take initiatives that ensure the customers become loyal to the organization and
purchase products from the company on a continuous basis. In cases where studies have
concentrated on the impact of customer trust on customer loyalty, contradicting results
have been found. Researchers noted trust to have no significant impact on customer
loyalty using community services data. Contrary to this, it has been found that trust has
an impact on customer loyalty using data from restaurant customers.
1.2 Research Focus
The focus of this research is the retail industry in the country of Saudi Arabia and
throughout the research the performance of the retail industry in Saudi Arabia and the
related factors like brand loyalty and customer satisfaction will be analyzed and
discussed.
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1.3 Research Aim and Research Questions
The aim set for the current research is to analyze the impact of brand loyalty and
consumer satisfaction on consumer purchase decision in retail industry. Considering the
aim of the study, certain research questions are developed below those are to be
addressed through completion of this research:
 What is the impact of brand loyalty impact on consumer purchase decision
within the Saudi Arabia retail industry?
 What is the impact of consumer satisfaction factors on consumer purchase
decision making in Saudi Arabia retail industry?
 What is the role of retail brand performance in enhancing consumer
satisfaction and loyalty?
 What is the function of brand efficiency in improving consumer purchase
intentions?
1.4 Research Objectives
The research objectives those are to be addressed in attainment of the study
findings re explained below:
 To analyze the brand loyalty impact on consumer purchase decision within the
Saudi Arabia retail industry
 To evaluate the impact of consumer satisfaction factors on consumer purchase
decision making in Saudi Arabia retail industry
 To analyze the role of retail brand performance through enhancing consumer
satisfaction and loyalty
 To investigate the function of brand efficiency in improving consumers purchase
intention
1.5 Outline of Structure
This dissertation consists of six specific chapters that is initiated from the
introduction to the research topic and ends with the conclusion section that summarizes
the research results and findings. The detailed structure is explained as follows.
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Chapter 1: Introduction – This chapter introduces the research topic and the
background of the topic to the reader. This chapter includes the background of the
research topic, focus, aim and objectives of the research.
Chapter 2: Literature Review – This chapter includes the findings that have been
gathered by various reputed researchers around the world regarding the research topic of
this dissertation. For this particular chapter, various research works have been collected
from online and offline sources and analyzed for gathering a basic insight on the research
topic on a global context rather than focusing only on the target region as mentioned in
the dissertation.
Chapter 3: Research Methodology – This chapter discusses the methodology that
will be followed throughout the course of this research. This chapter also includes the
different types of methodologies that can be followed throughout the course of the
research and the selection of suitable methodology for this research including
justification for the selection.
Chapter 4: Research Findings – This chapter includes collection and analysis of
all the data that have been gathered during the research using appropriate research
methods. The chapter also presents the detailed data that have been used for analysis
purposes.
Chapter 5: Discussion of Findings – This chapter discusses the findings from
data analysis and determines whether these findings are able to answer the research
questions and prove / disprove the research hypotheses.
Chapter 6: Conclusion – This is the concluding chapter of the dissertation that
summarizes all the findings from the entire research. This chapter also presents the scope
for future research activities.
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Chapter 2: Literature Review
2.1 Introduction
This literature review is based on the study of the three main variables that
constitute the overall research topic i.e. brand loyalty, customer satisfaction and
consumer purchasing behavior. The objective of this literature study is to find the
relationship between these three dependant variables using various sources of literature
where reputed researchers have studied the same and published their findings and results.
While this research topic is focused on the retail industry in Saudi Arabia, the literature
review is conducted on global context in order to get a wider view rather than only a
single region.
2.2 Brand Loyalty
Consumer satisfaction and brand loyalty have been considered as important
marketing goals for the organizations. Marketing professionals consider consumer loyalty
to serve as a multidimensional process (Alavi et al. 2016). Consumer satisfaction as well
as brand loyalty serves as an emerging process which is deemed to serve as a major
concern for which most of the companies are highly profit sensitive (Bauer 2014). It has
been gathered that consumer satisfaction is considered to have a considerable impact on
brand loyalty along with a real re-purchase behavior of the brand results in long-term
business profits. Focused on such scenario, the current paper focuses on analyzing the
ways in which brand loyalty and consumer satisfaction impact their purchase decision
within the retail industry. The major objective behind the improvement is to observe the
consumer purchase behavior that is highly important in company’s performance along
with maintaining sustainable growth within a competitive environment.
Choy (2014) defines brand loyalty as the preference of a buyer for a particular
brand of product irrespective of various other factors like product, quality, quantity and
others. Establishing brand loyalty is one of the main objectives of any business
organization as it significantly helps the company to overcome market competition. There
are certain primary conditions that are essential for building brand loyalty. The condition
might be superior quality of products provided by the company that enables the company
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to establish reputation and gain the trust of the customers. Brand loyalty can only be built
if there is sufficient trust of the customer on that particular brand. Once brand loyalty is
developed, the company needs to maintain the same through various factors like adequate
quality of the products, pricing, customer support and others.
Bowen and McCain (2015) have explained the three main stages that build up
brand loyalty among the customers. These three stages are brand recognition, brand
preference and brand insistence. According to the authors, brand recognition is defined as
the awareness of the customer regarding the name, benefits and packages provided by the
brand. Building brand awareness is important in order to gain popularity and customer
trust. The authors also explained that extensive marketing campaigns are essential to raise
brand awareness among the potential customers. The authors have also discussed about
the importance of brand preference in building successful brand loyalty. The concept of
brand preference is mainly applicable when there are similar products sold by different
brands in the same target market. In that case, if a customer prefers one particular brand,
he will purchase products from that particular brand only irrespective of any other factors
as long as they are not extremely negative (like extremely expensive and non-affordable).
Furthermore, as per the authors, brand preference is a strong indicator of the success of
the marketing strategies of that particular brand. Brand insistence is the final stage of
brand loyalty in which the customer purchases products from only that brand and does
not accept any other alternative brands. Furthermore, at this stage, the customer also
recommends the brand to friends and family members thus the brand gets automatically
promoted by the regular customers.
Rubio, Villaseñor and Yagüe (2017) introduced the concept of brand equity that
can be defined as the value of a brand to its owners. In other words, it is an asset that
signifies the value of the brand, brand awareness among customers, brand loyalty and
various other factors. Thus, it can be said that once the company earns significant brand
loyalty, its brand equity gains very high value (including the monetary value) in the
market. The authors have also discussed about various benefits of branding to a business
organization. These benefits are listed below.
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I. Quality – As per the authors, branding does not only represents a
particular company and its product but also the quality of the project. The
products with reputed brands mostly ensure superior quality of products
and thus, building the trust of customers has become easier (Kengthon
2011). Moreover, once the brand value of a company is sufficiently built,
there is no option for the company to compromise with the quality of the
products as it will lead to quick decline of the brand value.
II. Commercial Advantage – Having a strong brand value provides
considerable commercial advantage to the organization. The customers
within a particular target region is always more inclined towards a strong
brand rather than other small and unknown brands due to the common
perception that branded products are far superior in quality than non-
branded products (Mei, Ling and Piew 2012). Moreover, having a strong
brand value also helps the company to forge partnerships with other
brands for joint venture in the market. Non branded companies are not
able to enjoy this advantage. As a result, branded companies grow much
faster than non-branded companies.
III. Supply Chain – Most of the non-branded products are sold through
numerous supply chains. After the products are manufactured, it is sent
through several stages of suppliers to wholesaler and finally to the retailer.
However, branded products are generally sold by the manufacturers
themselves from their own specific stores. As a result, the supply chain
costs and issues are greatly reduced.
IV. Psychological Factor – There are many customers who believe owning
products from certain brands represents a symbol of status and aristocracy.
Some of the real world examples include a car from Mercedes, clothes and
other products from Emporio Armani or Ralph Lauren, smartphone from
Apple and many others (Leland and Bailey 2006). This factor generates
happiness and psychological advantage to the customers and thus these
brands are widely popular around the world especially among the
aristocratic classes.
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Bowen and McCain (2015) said that brand loyalty enhances the chances of the
customer to buy more products of the brand that he uses consistently. Brand loyalty
enhances the relationship between the customer and the specific company that sells the
brand and hence, it is proposed that brand loyalty has positive influence on the purchase
decision of the customer.
Hypothesis 1: Brand Loyalty has positive impact on consumer purchase decision.
2.3 Customer Satisfaction
Ramanathan, Subramanian and Parrott (2017) define customer satisfaction as the
state of the customer when his requirements are met by the products provided by the
seller in terms of quality, price and quantity. However, on a larger scale, customer
satisfaction can be defined as the fulfilling of the requirements of the customer base
within a target region even during high competition in the market. According to the
authors, establishment of customer satisfaction is one of the primary requirements for
overall success of the business.
Blut, Beatty, Evanschitzky and Brock (2014) explained consumer satisfaction as
the most important strategy for significant along with sustained marketing performance
and it is important within the marketing concept. Within the academic literature, the
brand loyalty and consumer satisfaction model has a long record for frequently
purchasing retail products. Consumer satisfaction is explained as the al in its place and it
is also deemed to be an aspect that enhances organizational performance through
increasing their purchase intention within the retail industry. Consumer satisfaction is
deemed to impact their purchase intention within the retail industry. Moreover, the idea
of satisfying consumers tends to have an effective appeal which makes it believe that
consumer satisfaction might result in increased loyalty that results in increased profit
gain. For the retail organizations, consumer satisfaction is turning out to be the guiding
principle for maintaining marketing tactics along with developing marketing conducts
(Bowen and Chen McCain 2015). In the recent scenario, the retail organizations are
focusing on enhancing consumer satisfaction strategy for the reason that consumers have
increased chances to go for repurchase of the same product.
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Söderlund and Colliander (2015) said in the current day market, competition is
increasing at a lightning pace. In addition to local and small brands, several large and
multinational brands are also competing over similar products. Some of the most known
examples of competition include Apple-Samsung, Coca Cola-Pepsi, Marvel-DC, Ford-
GM, Airbus-Boeing and many others. The authors stated that in this type of situation,
earning customer satisfaction is a tough task as various customers have various personal
criteria and choices regarding the selection of the brand.
Veloutsou (2015) explored the theme of customer satisfaction and determined
whether it is a static or dynamic variable. According to the works published by them,
they stated that customer satisfaction is extremely dynamic in nature and can change any
time based on the quality of products. Furthermore, if multiple high quality brands are
available in the same region, the customers are more likely to be less satisfied with one
particular brand and switch brands frequently for purchasing products of their choices.
The author also explains that as per the general scenario, if a customer is satisfied with
the products purchased from a brand, he is more likely to avoid further shopping for some
period of time. In other words, achieving high customer satisfaction actually inhibits the
purchasing decision of the customer, especially in the retail sector.
Hypothesis 2: Customer satisfaction has negative impact on the consumer
purchase decision.
2.4 Purchase Decision
Purchase decision of a consumer is defined as the process by which the customer
decides whether to buy or not to buy a product from a brand. According to Yoo and Park
(2016), the purchase decision of a consumer generally depends on a wide range of factors
like actual need of the product, product price, brand value, importance and others. The
success of a particular brand lies in the fact that it is able to convince the consumers to
purchase their products after making them satisfied through services, quality of products,
pricing policies and marketing strategies.
King, Schilhavy, Chowa and Chin (2016) researched about the relationship
between brand loyalty, customer satisfaction and consumer purchase decision. As per the
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authors, establishment of customer satisfaction and brand loyalty are two major steps for
enhancing the positive consumer purchase decision. In other words, the authors described
that if the customer is not loyal to the brand or not satisfied with the products or services,
he will change his decision to purchase products from the brand easily and will switch to
other brands.
According to Kumar, Anand and Song (2017), marketing and promotional
strategies play major roles in determining the consumer purchase decision. The author
stated that it is the natural psychology of the customers to get attracted to the marketing
and promotional activities of brands that are well executed and attractive in nature as a
whole. The authors cited the example of Apple – a smartphone brand that has become
massively popular around the world due to the world class marketing and promotional
strategies adopted by the company. These marketing strategies make the customers feel
that these specific products will be a status symbol for them and thus, they are more
likely to purchase the product from the brand.
Kim, Lee and Suh (2015) emphasized that before brand loyalty, customer
satisfaction and other such factors, the primary factor that affects the customer purchase
decision is the economic status of the customers. The customers with huge amount of
resources are more likely to purchase branded products whereas the customers with
limited resources will settle only for non-branded local products. In that case, these
customers will not exhibit any brand loyalty characteristic and his purchase decision will
be solely based on the actual price of the product.
Kumar, Anand and Song (2017) summarized that consumer purchase decision is
not a simple factor to analyze, rather it is extremely complex to study as it depends on a
large number of factors including psychology, economy, quality, quantity and others.
2.5 Retail Industry Analysis in Saudi Arabia Context
Saudi Arabia retail market includes the exclusive stores, supermarket, specialty
retailers, and general merchandise stores along with the non-store retailers (Vendel and
Bredican 2014). Market by geography for the Saudi Arabia retail sector includes Central,
Western, Eastern, Northern and the Southern region. Saudi Arabia retail sector has a
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population of approximately 33 million individuals existing within the kingdom. The
total number of supermarkets and hypermarkets is for around 1255 outlets or around 3%
of the over the overall retail outlets. These account for 37% over of overall grocery sales
within the nation (Vendel and Bredican 2014). In the retail market of Saudi Arabia, Lulu
Hypermarket also expanded their chains by adding new outlets. The grocery retail market
grew by 5% per year in value terms from the year 2012 to the year 2018 (Vendel and
Bredican 2014). Traditional grocery retailers of Saudi Arabia continue to be a vital aspect
of grocery retail within Saudi Arabia majorly because of strong networks local family
departmental stores. This is anticipated for around 57% of the overall market and it is
decreasing with modern retail expansion. Certain supermarkets chains like Farm
Superstores along with Al Jazeers Supermarkets are developing effective expansion
programmers that is considering to increasing the accessibility of imported brands.
The trend in the direction of efficient convenience observed Bin Dawood Group
to turn out to be the first Saudi grocery retailer in launching a Smartphone application in
the year 2016 that facilitates its consumers to place orders for its brand in online medium.
From the retail industry report analysis of Saudi Arabia, it has been gathered that
independent small grocers are anticipated to remain popular but decreasing choice for the
Arabian consumers. Hypermarkets and supermarkets are also set for registering
increasing growth rates within the grocery retailers over the forecasted period with
respective value CAGRs of 5% as well as 6% considerably at constant 2017 prices
(Ström, Vendel and Bredican 2014).
It is also observed within the Saudi Arabia, such shift is anticipated to offer 20000
employment chances for the nationals within the grocery retailers as an aspect of the
nation’s enhancing marketing approach (Ström, Vendel and Bredican 2014). At the end
of the year 2017, e-commerce emerged within the new channels within Saudi Arabian
retailing. This is particularly correct within the grocery retailing with Bin Dawood, Al
Raya and Panda Retail Co launching online grocery shopping within their websites or
within their individual shopping within their websites or their individual applications
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Figure 1: Historic Retail Industry Growth in Saudi Arabia
(Source: Ström, Vendel and Bredican 2014)
Retail industry of Saudi Arabia is observed to boom for the reason that the nation
offers the retail markets to provide the investors and developers with unique selling
proposition. Driven by exceptional fundamentals encompass population growth along
with increased percentage of young generation. This is related with increasing disposable
income, listed entertainment options along with harsh climates because of which the
retailers and developers with effective retail performance (Ström, Vendel and Bredican
2014). An evaluation of the major factors that increases the retail space demand
particularly the malls, it facilitates in estimating the future growth trends. It is also
observed that strong fundamental of Saudi Arabia are highly contributing towards
positive viewpoint on the retail sector of the nation. From the analysis of speeding pattern
of consumers within Saudi Arabia retail industry it has been gathered that the national
brands are familiar and offer increased quality assurance in generating consumer loyalty.
Moreover, 49% of the Saudi Arabian consumers are deemed to be loyal to the branded
offerings (Ström, Vendel and Bredican 2014). Poor quality perceptions along with
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Brand Loyalty
Customer Satisfaction
Consumer Purchase Decision
enhanced brand loyalty can impose several barriers to the growth of private label retail
companies.
2.6 Conceptual Framework
From the overall study of literature on the research topic, a basic conceptual
framework can be developed for this research. In this research, there are three main
dependant variables that are interrelated with each other – customer satisfaction, brand
loyalty and consumer purchase decision. The framework is developed as shown in the
figure below.
Figure 2: Conceptual Framework of the Research
(Source: Created by Author)
Variable 1: Brand Loyalty – As described before, brand loyalty is defined as the
degree to which the customer purchases product of the same brand over continuous
period of time. Now, there are several independent factors that influence the brand
loyalty of a consumer. These factors include product quality, price, availability in market,
customer service (for certain products only), quantity (for certain products only) and
others.
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Variable 2: Customer Satisfaction – Customer satisfaction is the degree to which
the customer is happy or content for purchasing a particular product from a seller. With
increasing satisfaction, the customer will have more urge to buy more products from the
seller but at the same time, he will buy fewer products as he is content with the existing
quantity. Customer satisfaction is also dependant on several other independent factors
like economic condition of the customer, product quality and quantity, price of the
products and others.
Variable 3: Purchase Decision – Purchase decision is defined as the process of
thoughts of a customer regarding whether he should buy a particular product or not.
Purchase decision is a dependant variable that is proposed to be affected positively or
negatively by brand loyalty and customer satisfaction.
This research is conducted in the target area of Saudi Arabia retail industry in
order to establish accurate and suitable connection between the three dependant variables
under consideration.
2.7 Discussion of Findings from Literature on Saudi Arabia Context
From the research in Saudi Arabia, it has been found that consumer satisfaction as
the most important strategy of the retail companies for significant along with sustained
marketing performance and it is important within the marketing concept. Within the
academic literature, the brand loyalty and consumer satisfaction model has a long record
for frequently purchasing retail products. The findings state in the current day market in
Saudi Arabia, competition is increasing at a lightning pace. In addition to local and small
brands, several large and multinational brands are also competing over similar products.
The findings from Saudi Arabia include the theme of customer satisfaction and
determined whether it is a static or dynamic variable. According to the works published
by researchers, they stated that customer satisfaction is extremely dynamic in nature and
can change any time based on the quality of products. Furthermore, if multiple high
quality brands are available in the same target area, the customers are more likely to be
less satisfied with one particular brand and switch brands frequently for purchasing
products of their choices. The author also explains that as per the general scenario, if a
customer is satisfied with the products purchased from a brand, he is more likely to avoid
15

further shopping for some period of time. Consumer satisfaction and brand loyalty have
been considered as important marketing goals for the organizations. Marketing
professionals consider consumer loyalty to serve as a multidimensional process (Alavi et
al. 2016). Blut, Beatty, Evanschitzky and Brock (2014) explained consumer satisfaction
as the most important strategy for significant along with sustained marketing
performance and it is important within the marketing concept. Within the academic
literature, the brand loyalty and consumer satisfaction model has a long record for
frequently purchasing retail products. Consumer satisfaction is deemed to impact their
purchase intention within the retail industry. Moreover, the idea of satisfying consumers
tends to have an effective appeal which makes it believe that consumer satisfaction might
result in increased loyalty that results in increased profit gain. It has been gathered that
consumer satisfaction is considered to have a considerable impact on brand loyalty along
with a real re-purchase behavior of the brand results in long-term business profits.
Focused on such scenario, the current paper focuses on analyzing the ways in which
brand loyalty and consumer satisfaction impact their purchase decision within the retail
industry. Consumer satisfaction as well as brand loyalty serves as an emerging process
which is deemed to serve as a major concern for which most of the companies are highly
profit sensitive (Bauer 2014). The major objective behind the improvement is to observe
the consumer purchase behavior that is highly important in company’s performance along
with maintaining sustainable growth within a competitive environment.
Retention is considered to be important in maintaining consumer loyalty and the
retail networks in Saudi Arabia are making attempts to attain increased competitive
advantage through increasing value by means of loyalty and efficiency (So, King and
Wang 2016). As sales promotions has turned out to be an integral aspect within the retail
supply chain planning, consumer behavioral aspects based on loyalty and the service
operations in retail companies are increasingly challenged. Consumer satisfaction as well
as brand loyalty serves as an emerging process which is deemed to serve as a major
concern for which most of the companies are highly profit sensitive. According to the
views presented in this research, it is gathered that consumer satisfaction is generally
used as a predictor of the upcoming customer purchases. Satisfied consumers are
considered to have an increased opportunity to go for repeat purchases at the time of
16

recommending that other try the satisfaction source. Moreover, because of increased
brand loyalty, the consumers tend to be associated to their desired brand in choosing their
products. Choy (2014) explained consumer retail loyalty as an increased commitment of
the consumers for repurchasing a desired retail establishment, despite certain situational
impacts along with marketing efforts.
Blut, Beatty, Evanschitzky and Brock (2014) explained consumer satisfaction as
the most important strategy for significant along with sustained marketing performance
and it is important within the marketing concept. Within the academic literature, the
brand loyalty and consumer satisfaction model has a long record for frequently
purchasing retail products. Consumer satisfaction is deemed to impact their purchase
intention within the retail industry. Moreover, the idea of satisfying consumers tends to
have an effective appeal which makes it believe that consumer satisfaction might result in
increased loyalty that results in increased profit gain. For the retail organizations,
consumer satisfaction is turning out to be the guiding principle for maintaining marketing
tactics along with developing marketing conducts (Bowen and Chen McCain 2015).
Consumer satisfaction is explained as the al in its place and it is also deemed to be an
aspect that enhances organizational performance through increasing their purchase
intention within the retail industry. In the recent scenario, the retail organizations are
focusing on enhancing consumer satisfaction strategy for the reason that consumers have
increased chances to go for repurchase of the same product. The grocery retailers in
Saudi Arabia need to enhance consumer satisfaction continuously so that it indicates a
central strategic focus for the consumer focused companies (Zhang, van Doorn and
Leeflang 2014). This is for the reason that the satisfied consumers tend to develop
positive attitudes that light impact the consumer loyalty resulting in frequent purchases,
increase in purchase volume along with purchase of other services or goods provided by
the retail companies. Retail consumers in distinct nations might expect as well as
perceive distinct level and types of service encounters. For this reason, there is an
increased requirement to analyze the difference between consumers perceived value in
distinct areas of the retail market (Söderlund and Colliander 2015).
17

This is also observed to have effective potential to result in consumers switching
behavior to the alternative retail companies. With increasing competition in the global
retail industry, the grocery retailers in Saudi Arabia realize the aspects those are the
determinant value based attributes which is deemed vital by the consumers at the time of
analyzing the retailers or grocery shopping stores. It is deemed to be imperative that
grocery retailers realize that there are three factors affecting consumer purchase intention
based on their brand satisfaction (Çifci et al. 2016). This encompasses physical factors
that include functional aspects such as comfort, layout and privacy along with aesthetic
factors like color, architecture, materials as well as style of the store. The major objective
behind the improvement is to observe the consumer purchase behavior that is highly
important in company’s performance along with maintaining sustainable growth within a
competitive environment (Stathopoulou and Balabanis 2016). Brand name awareness has
a vital role in consumer decision making for the reason that in case the consumers have
heard about a brand name, they tend to feel highly comfortable in purchase decision
making (Vendel and Bredican 2014). Consumers of the retail sector tend to purchase
brands with those they are similar with and along with that brand awareness is
accountable for generating strong emotional bonds with the retail brands. Brad loyalty
facilitates the retail companies to differentiate its business from its business rivals. Retail
brands focus on increasing consumer loyalty in order to attain positive consumer
response that can further enhance their purchase intention towards the retail brands. The
departmental stores of Saudi Arabia offer quality commodities because of which brand
loyalty of the consumers get increased and hey generate a commitment to repurchase the
brand (Ström, Vendel and Bredican 2014). Consumer satisfaction increases brand
awareness that further enhances brand equity and in the retail industry corporate
executives are considering it to be competitive in increasing communication and contact
among the organization and the related consumers.
Saudi Arabia retail industry is anticipated to grow with CAGR of around 7.5%, in
terms of value over the years 2017 to the year 2022 (Vaioleti 2016). Increase in
culturally diversified population existence of an increasingly stable market despite
dependence on dropping oil economy along with increased number of construction
projects are observed to increase the retail market in Saudi Arabia. There are certain
18

factors within the industry that is anticipated to increase the demand for retail in the
upcoming five years. A drastic shift in the Saudi Arabia trail industry is associated with
providing importance to the modern trade. It is evident that, consumers seek out
alternative means of attaining provisions that has resulted in permanent changes within
the shopping behavior of consumers (Veloutsou 2015). Huge retail operations within
several formats are dominating the industry along with that competition within the retail
market is increasing steadily in the emerging nation.
There are certain major players those operate their business within the Saudi
Arabia retail market and these include Amazon, Wall-mart, Lulu Group, Spinney’s,
Carrefour, Al Raya, Fu-Com and Al Sadan and many more (Yoo and Park 2016). It is
gathered from the graph indicated above that the market size of Saudi Arabia retail
market employs a bottom-up approach. In such approach the retailers’ value sales data for
distinct types of distribution channels within the retail market that was recorded and
along with that forecast for the future years was recorded. From the data gathered from
the industry experts it has been gathered that the historical sales data of the respective
retailers to attain an overall market size.
This is anticipated for around 57% of the overall market and it is decreasing with
modern retail expansion. The total number of supermarkets and hypermarkets is for
around 1255 outlets or around 3% of the over the overall retail outlets. These account for
37% over of overall grocery sales within the nation (Vendel and Bredican 2014). In the
retail market of Saudi Arabia, Lulu Hypermarket also expanded their chains by adding
new outlets. Certain supermarkets chains like Farm Superstores along with Al Jazeers
Supermarkets are developing effective expansion programmers that is considering to
increasing the accessibility of imported brands.
Associations, companies, alliances and associations associated with retailing.
Saudi Arabia retail market includes the exclusive stores, supermarket, specialty retailers,
and general merchandise stores along with the non-store retailers (Vendel and Bredican
2014). Market by geography for the Saudi Arabia retail sector includes Central, Western,
Eastern, Northern and the Southern region. Saudi Arabia retail sector has a population of
approximately 33 million individuals existing within the kingdom. The grocery retail
19

market grew by 5% per year in value terms from the year 2012 to the year 2018 (Vendel
and Bredican 2014). Traditional grocery retailers of Saudi Arabia continue to be a vital
aspect of grocery retail within Saudi Arabia majorly because of strong networks local
family departmental stores. The trend in the direction of efficient convenience observed
Bin Dawood Group to turn out to be the first Saudi grocery retailer in launching a
Smartphone application in the year 2016 that facilitates its consumers to place orders for
its brand in online medium. From the retail industry report analysis of Saudi Arabia, it
has been gathered that independent small grocers are anticipated to remain popular but
decreasing choice for the Arabian consumers. Hypermarkets and supermarkets are also
set for registering increasing growth rates within the grocery retailers over the forecasted
period with respective value CAGRs of 5% as well as 6% considerably at constant 2017
prices (Ström, Vendel and Bredican 2014).
At the end of the year 2017, e-commerce emerged within the new channels within
Saudi Arabian retailing. This is particularly correct within the grocery retailing with Bin
Dawood, Al Raya and Panda Retail Co launching online grocery shopping within their
websites or within their individual shopping within their websites or their individual
applications. It is also observed within the Saudi Arabia, such shift is anticipated to offer
20000 employment chances for the nationals within the grocery retailers as an aspect of
the nation’s enhancing marketing approach (Ström, Vendel and Bredican 2014). The
findings have also shown about the importance of brand preference in building successful
brand loyalty. Furthermore, as per the findings, brand preference is a strong indicator of
the success of the marketing strategies of that particular brand in country. Brand
insistence is the final stage of brand loyalty in which the customer purchases products
from only that brand and does not accept any other alternative brands. Furthermore, at
this stage, the customer also recommends the brand to friends and family members thus
the brand gets automatically promoted by the regular customers. Consumer satisfaction as
well as brand loyalty serves as an emerging process which is deemed to serve as a major
concern for which most of the companies are highly profit sensitive. It has been gathered
that consumer satisfaction is considered to have a considerable impact on brand loyalty
along with a real re-purchase behavior of the brand results in long-term business profits.
There are certain major players those operate their business within the Saudi Arabia retail
20

market and these include Amazon, Wall-mart, Lulu Group, Spinney’s, Carrefour, Al
Raya, Fu-Com and Al Sadan and many more. From the data gathered from the industry
experts it has been found that the historical sales data of the respective retailers to attain
an overall market size. Saudi Arabia retail market includes the exclusive stores,
supermarket, specialty retailers, and general merchandise stores along with the non-store
retailers. Market by geography for the Saudi Arabia retail sector includes Central,
Western, Eastern, Northern and the Southern region. Saudi Arabia retail sector has a
population of approximately 33 million individuals existing within the kingdom. The
grocery retail market grew by 5% per year in value terms from the year 2012 to the year
2018. Traditional grocery retailers of Saudi Arabia continue to be a vital aspect of
grocery retail within Saudi Arabia majorly because of strong networks local family
departmental stores. This is anticipated for around 57% of the overall market and it is
decreasing with modern retail expansion.
Retail industry of Saudi Arabia is observed to boom for the reason that the nation
offers the retail markets to provide the investors and developers with unique selling
proposition. Driven by exceptional fundamentals encompass population growth along
with increased percentage of young generation. This is related with increasing disposable
income, listed entertainment options along with harsh climates because of which the
retailers and developers with effective retail performance (Ström, Vendel and Bredican
2014). An evaluation of the major factors that increases the retail space demand
particularly the malls, it facilitates in estimating the future growth trends. It is also
observed that strong fundamental of Saudi Arabia are highly contributing towards
positive viewpoint on the retail sector of the nation. From the analysis of speeding pattern
of consumers within Saudi Arabia retail industry it has been gathered that the national
brands are familiar and offer increased quality assurance in generating consumer loyalty.
Moreover, 49% of the Saudi Arabian consumers are deemed to be loyal to the branded
offerings (Ström, Vendel and Bredican 2014). Poor quality perceptions along with
enhanced brand loyalty can impose several barriers to the growth of private label retail
companies.
21

The total number of supermarkets and hypermarkets is for around 1255 outlets or
around 3% of the over the overall retail outlets. These account for 37% over of overall
grocery sales within the nation. In the retail market of Saudi Arabia, Lulu Hypermarket
also expanded their chains by adding new outlets. Certain supermarkets chains like Farm
Superstores along with Al Jazeers Supermarkets are developing effective expansion
programmers that is considering to increasing the accessibility of imported brands. The
findings also explained that extensive marketing campaigns are essential to raise brand
awareness among the potential customers in Saudi Arabia. Focused on such scenario, the
current paper focuses on analyzing the ways in which brand loyalty and consumer
satisfaction impact their purchase decision within the retail industry. The major objective
behind the improvement is to observe the consumer purchase behavior that is highly
important in company’s performance along with maintaining sustainable growth within a
competitive environment.
In other words, achieving high customer satisfaction actually inhibits the
purchasing decision of the customer, especially in the retail sector. Consumer satisfaction
is deemed to impact their purchase intention within the retail industry. Moreover, the idea
of satisfying consumers tends to have an effective appeal which makes it believe that
consumer satisfaction might result in increased loyalty that results in increased profit
gain. For the retail organizations, consumer satisfaction is turning out to be the guiding
principle for maintaining marketing tactics along with developing marketing conducts. In
the recent scenario, the retail organizations are focusing on enhancing consumer
satisfaction strategy for the reason that consumers have increased chances to go for
repurchase of the same product.
2.8 Conclusion
As discussed in the review of literature, it can be said that the concept of
consumer purchase decision cannot be simply limited within the conceptual framework
presented above as it has far more major factors that have significant impact on it.
However, considering the scope of this research, other factors are excluded and the
research will only look to establish the relationship between the three factors as shown in
the conceptual framework.
22

Chapter 3: Research Design and Methodology
3.1 Introduction
In this section, the researcher is focused on evaluating the techniques through
which effective results can be obtained from consumers and can be analyzed. The
objective of this section is to explain the research methodology that will be followed in
analyzing the impact of consumer loyalty and satisfaction on their purchase decision
making within the retail industry. Focused on the same, the research methodology will
focus on explaining approach, philosophy, design, data collection process, data analysis,
ethical considerations along with analyzing data validity and reliability methods that will
be used for attaining useful study implications (So, King, Sparks and Wang 2016).
3.2 Method Outline
Research design employed is focused on analyzing the consumer loyalty and
satisfaction in enhancing consumer purchase intention within retail industry Saudi
Arabia. The current research has focused on selecting the research design that contains a
detailed description of the aspects impacting the findings of the research (Love, Staton
and Rotman 2016). For this reason, exploratory research design will be employed in the
study as it facilitates in effective explanation regarding the need for the retail companies
in Saudi Arabia to improve its consumer service so that they consider re-purchase and
develop loyalty towards retail brands. Research design selection facilitates the researcher
in attaining an opportunity of guiding the research in the direction of attaining a particular
objective in attaining predetermined research objectives. Exploratory research design will
be used in the current research in recognizing the reasons regarding consumer satisfaction
and loyalty factors prevailing within the retail sector of Saudi Arabia that results in
enhance purchase intention of these consumers (Lewis 2015). In addition, this research
design also facilitates in exploiting and explaining the problems that the current research
intends to deal with. This research design is selected for the reason that it offers the
researcher with a better opportunity in increasing understanding and knowledge base.
23

3.3 Research Outline
Figure 3: Research Onion
(Source: Saunders et al. 2009, pp. 52)
Research onion is a structure that helps to define the proper methodology of the
research in a structural process. Research onion has six layers and every layer of this
onion helps to define the appropriate manner of the methodology of the research. First
layer of this research onion gives the idea of research philosophies. Second layer of this
onion provides research approach etc.
3.4 Research Philosophy
Selecting suitable philosophy will facilitate the researcher in recognizing the
essence of study through employing better research paradigm. There are types of research
philosophies such as positivism, interpretvism and realism (Ramanathan, Subramanian
and Parrott 2017). The recent research intends to analyze the impact of consumer
satisfaction and loyalty on the purchase decision making of Saudi Arabia retail industry.
For this reason, in the current research, the researcher will make an increased attempt in
evaluating the challenges faced by the retail companies of the nation in increasing
consumer loyalty and satisfaction for attuning increased purchase intention of the
24

consumers (Rubio, Villaseñor and Yagüe 2017). Considering the same, the researcher
will implement the philosophy of positivism through associating the models and theories
explained within the background and industry background in the recent scenario. The
recent research centers on analyzing the consumer satisfaction and loyalty importance in
improving the purchase intention decision of consumers towards the retail brands.
Positivism research philosophy is considered to be most suitable to be used in the current
research as it can facilitate in attaining suitable respondents responses (Sasmita and Mohd
Suki 2015). Moreover, the researcher has not has not implemented any other research
philosophy as they are not relied on theories and models those are scientifically proven.
3.5 Research Approach
Research approach is considered to be an important step in carrying out research
in order to attain actual and preferable research results. Considering the same, the
research approach facilitates researcher in recognizing all the steps in order to carry out
desired research activities (Oke et al. 2016). Research approach that can be used in this
research includes both the inductive and deductive research approach that facilitates in
attaining suitable research findings. The recent research focuses on evacuating the
consumer loyalty and satisfaction factors impacting purchase intention of the consumers
in the Saudi Arabia retail industry. The researcher will implement deductive research
approach to carry out the research and this is for the reason that the researcher has
employed quantitative research analysis for attaining suitable study results (Nyadzayo
and Khajehzadeh 2016). The quantitative analysis is carried out through analyzing the
responses attained from the respondents. Moreover, positivism philosophy is also deemed
to be directly associated with analysis of quantitative data within which relevant data
collected has been analyzed with the help of previous easing models and trends along
with proven facts. For this reason, deductive research approach is deemed to be highly
important in attaining useful implications from the current study (Park, Kim and Kwon
2017).
3.6 Data Collection and Analysis
For the purpose of this research, both qualitative and quantitative data will be
collected for analysis. The qualitative data collection will be done through interviews of
25

several managers of brands in Saudi Arabia, whereas the quantitative data collection will
be done through the questionnaire survey of the customers. The focus of the data
collection will be based on brand loyalty, customer satisfaction and consumer purchase
decision within Saudi Arabia retail industry.
3.7 Sampling
For the purpose of data collection, the sample size of the questionnaire survey is
100 whereas the sample size for the qualitative data analysis is 5. After collection of the
data from the samples, they will be analyzed for determining the validity of the research
hypotheses. Saudi Arabia is a country of 33 million inhabitants and considering the scope
and limitation of this research, it is not possible to even choose a sample size 1% of the
total population of the country. Hence, in order to cope with the academic limitation of
the research, sampling was done on 100 participants who were asked to participate in the
questionnaire study. It is to be noted here that the sample has been completely random
and no bias was applied. An advertisement was given in social media platform to
participate in the survey and data from random 100 participants were considered.
3.8 Ethical Considerations
In carrying out research on analyzing the impact of consumer loyalty and
satisfaction for attaining better purchase intention in selecting their retail brand in Saudi
Arabia. The secondary data was gathered from several valid along with authentic
resources in order to make sure of the research outcomes trustworthiness (Kumar, Anand
and Song 2017). The researcher in the current study has also considered avoiding asking
certain delicate questions within the survey in order to persuade the participants taking
participation within the process of survey with attaining their mutual permission. In
addition, the identity of the respondents was not considered to be disclosed for certain
sanctuary concerns within which no business use of the research statement is observed to
be entertained from the part of the researcher (Lemon and Verhoef 2016). Moreover, the
researcher will also make sure that this study is sole work of the researcher and proper
credibility will be provided to the theories and facts gathered from past researches.
26

Chapter 4: Findings / Results
The data that has been gathered from employing suitable data collection methods
will be analyzed through using several data analysis techniques. In consideration to same,
it is gathered that proper selection of analytical techniques is important to attain suitable
and pertinent research findings (King, Schilhavy, Chowa and Chin 2016). In addition,
this also facilitates in maintaining transparency along with composed data interpretation.
The quantitative data that will be analyzed will be represented in the form of graphs and
tables that can simplify the interpretation technique of collected data. In addition, MS
excel statistical analysis tool will be used in converting the survey respondents opinion
within percentage in anticipating the respondents insights trend. Correlation and
regression analysis will be carried out in analyzing the impact of consumer loyalty and
satisfaction impact on purchase intention in retail industry of Saudi Arabia (King,
Schilhavy, Chowa and Chin 2016).
4.1 Quantitative Data Analysis
For the purpose of the quantitative data analysis, the following questionnaire was
used.
1. Please specify your gender
2. What is your age group?
3. How long have you been the customer of Saudi Arabia retail industry?
4. What are the most common products do you buy from retail stores?
5. Do you any specific brand that you prefer over others?
6. Do you think it is important to purchase only branded products?
7. Do you think branded products are superior to the locally made non-branded products in terms
of quality?
8. You purchase branded products for which of the following reasons?
9. Are you satisfied with a single brand for a particular product?
10a. What are the factors affecting your purchase decision? [Price]
10b. What are the factors affecting your purchase decision? [Quality]
10c. What are the factors affecting your purchase decision? [Design]
10d. What are the factors affecting your purchase decision? [Colour]
10e. What are the factors affecting your purchase decision? [Material]
27

10f. What are the factors affecting your purchase decision? [Variety]
10g. What are the factors affecting your purchase decision? [Comfort]
10h. What are the factors affecting your purchase decision? [Brand Name of the Company]
10i. What are the factors affecting your purchase decision? [Sales Promotions]
10j. What are the factors affecting your purchase decision? [Personal Satisfaction]
11a. Please respond to the answers as follows. [I choose a brand according to my social status]
11b. Please respond to the answers as follows. [Brand name stimulate my interest in choosing a
brand]
11c. Please respond to the answers as follows. [I prefer brands that I use regularly]
11d. Please respond to the answers as follows. [Price is the moderator of brand choice]
11e. Please respond to the answers as follows. [Income affects my purchasing behavior]
12. How much are you satisfied on the brands that you use regularly?
13. Will you change brands if you are not satisfied with the current brands you use?
14. Do you consider yourself loyal to some particular brands?
15. If multiple popular brands are available in the same region, will you considering purchasing
from all the different brands?
Table 1: Questionnaire for Data Collection
4.2 Qualitative Data Analysis
For the purpose of the qualitative data collection and analysis, the following main
questions were asked from the sample.
 How long have you been attached with this particular brand?
 What is the average estimated customer growth annually?
 How do you know that the customers are satisfied with the services /
products provided by the brand?
 How do you know that the customers are loyal to the brand?
Chapter 5: Analysis and Discussion of Findings
5.1 Analysis of Quantitative Data
Based on the questionnaire provided above, a detailed research has been
conducted on 100 people who have been residing in Saudi Arabia for a considerable
28

amount of time and are also regular customers to the retail industry. The data findings are
discussed as follows.
1. Gender
Respondents Total Respondents Percentage
Male 60 100 60%
Female 40 100 40%
Table 2: Gender Data
Of the 100 people surveyed with this questionnaire, 60 are male and the rest 40
are female.
2. Age Group
Respondents Total Respondents Percentage
18-25 22 100 22%
26-35 48 100 48%
36-45 16 100 16%
45+ 14 100 14%
Table 3: Demographics Data
Majority of the people interviewed in this survey belong to the age group of 26-35
(48%). With increasing age group, the number of respondents also decreases thus
signifying that the industry is mostly popular among the youth and middle aged
customers.
3. How long have you been the customer of Saudi Arabia retail industry?
29

Figure 4-19: Various Data Collected from Questionnaire Survey
The data states that most of the people surveyed are associated with the Saudi
Arabia retail industry for the last 11-15 years (49%). This signifies that there has been a
significant boom in the retail industry in the last one and a half decade, earning many
customers in the country.
4. What are the most common products do you buy from retail stores?
Figure 5
The survey data suggests that majority of sales in the retail industry in Saudi
Arabia is grocery. Although other products are also sold in retail stores, 45% of the
30

people (majority) prefer purchasing grocery from the stores more commonly than other
products. One possible behind this is that the groceries do not have to be branded and
have more or less fixed pricing policy throughout the country.
5. Do you any specific brand that you prefer over others?
Figure 6
As per this question, it is clear that a majority of the people (61%) does not have
any brand preference and this data suggests the customers do not have any strong brand
loyalty towards any specific brand. Rather, they purchase products from many brands as
they find suitable.
6. Do you think it is important to purchase only branded products?
31

Figure 7
A majority of the population (54%) has said that it is not important to purchase
only branded products. Thus, this part of the survey suggests the people in the country
does not have significant affinity towards branded products.
7. Do you think branded products are superior to the locally made non-branded
products in terms of quality?
Figure 8
32

Again, following the previous survey question, it is evident that majority of the
people think branded products are not necessarily superior to the local products in terms
of quality.
8. You purchase branded products for which of the following reasons?
Figure 9
Survey suggests people generally purchase branded products mainly due to the
value for money rather than the other reasons provided.
9. Are you satisfied with a single brand for a particular product?
33

Figure 10
This survey answer is also according to the previous answers as majority agrees
that they do not have satisfaction towards one single brand of product.
10. What are the factors affecting your purchase decision?
34

Figure: 11-13
Most of the respondents have agreed with the given options regarding purchasing
behavior.
11. Please respond to the answers as follows.
35

Figure 14-15
Most of the respondents have agreed with the given options regarding purchasing
behavior.
12. How much are you satisfied on the brands that you use regularly?
Figure 16
Majority of respondents show low satisfaction regarding the use of brands.
13. Will you change brands if you are not satisfied with the current brands you use?
36

Figure 17
However, in this question, most of the people have emphasized that they will not
change brands rapidly with time.
14. Do you consider yourself loyal to some particular brands?
Figure 18
Again on this case, most of the people do not consider themselves loyal to any
particular brand.
37

15. If multiple popular brands are available in the same region, will you consider
purchasing from all the different brands?
Figure 19
Here, the survey suggests the majority will look to purchase products within a
small pool of brands only.
5.2 Analysis of Qualitative Data
From the interview of the five managers undertaken, the following data has been
collected.
 All of the managers interviewed have been associated with their respective
brands for more than 10 years and have sufficient experience in the retail
industry in Saudi Arabia.
 The statistics presented by the managers show that the brands generally
experience 40-50% customer growth every year – an evidence that the
brands are growing at a fast pace.
38

 All the managers stated that they have implemented feedback system to
allow the customers to provide valuable insight regarding the services and
products.
 All the companies have rolled out customer loyalty programs with specific
benefits that not only attracts more customers but also ensure the
companies are able to keep track of the brand loyalty of the customers.
From the literature, it was found that brand loyalty enhances the chances of the
customer to buy more products of the brand that he uses consistently. Brand loyalty
enhances the relationship between the customer and the specific company that sells the
brand and hence, it is proposed that brand loyalty has positive influence on the purchase
decision of the customer. Accordingly, the first hypothesis of the research was developed
as “Brand Loyalty has positive impact on consumer purchase decision”. From the study
of the sample size in Saudi Arabia, as evident from the survey presented above, it can be
said that this hypothesis is only partially true. The people surveyed in this research have
showed through the survey they do not have absolutely loyalty towards one particular
brand and prefer to purchase products from different brands. On the other hand, their
purchase decisions are not influenced by any brand loyalty factor as they purchase
products from different brands as they feel necessary. Hence, the hypothesis is not
absolutely valid, especially for the test case in Saudi Arabia.
Again, from the literature, while considering the theme of customer satisfaction, it
was determined whether it is a static or dynamic variable. According to the works
published in literature, the authors stated that customer satisfaction is extremely dynamic
in nature and can change any time based on the quality of products. Furthermore, if
multiple high quality brands are available in the same region, the customers are more
likely to be less satisfied with one particular brand and switch brands frequently for
purchasing products of their choices. The authors also explain that as per the general
scenario, if a customer is satisfied with the products purchased from a brand, he is more
likely to avoid further shopping for some period of time. In other words, achieving high
39

customer satisfaction actually inhibits the purchasing decision of the customer, especially
in the retail sector. Accordingly, the second research hypothesis was developed as
“Customer satisfaction has negative impact on the consumer purchase decision”. The
survey results conducted among the people in Saudi Arabia state that they prefer value
for money for the products they purchase and moreover, they are not satisfied with one
particular brand. As a result, they purchase from different brands for the products when
they find them value for money as well as other favorable possible factors like trend,
popularity, cost and others. Furthermore, it has also been found that they do not have any
particular preference for only branded products as they have stated that they purchase
from local companies as well. From this, it can be derived that as long as they are
satisfied, they will continue to purchase products from both international and local
brands. Thus, contrary to the second research hypothesis, from the research, it has been
derived that customer satisfaction actually has positive impact on the consumer purchase
decision. Thus the second research hypothesis is not true for the test case area in Saudi
Arabia.
5.3 Detailed Discussion Based on the Findings
From the survey and research in Saudi Arabia, it has been found that consumer
satisfaction as the most important strategy of the retail companies for significant along
with sustained marketing performance and it is important within the marketing concept.
Within the academic literature, the brand loyalty and consumer satisfaction model has a
long record for frequently purchasing retail products. The findings state in the current day
market in Saudi Arabia, competition is increasing at a lightning pace. In addition to local
and small brands, several large and multinational brands are also competing over similar
products. The findings from Saudi Arabia include the theme of customer satisfaction and
determined whether it is a static or dynamic variable. According to the works published
by them, they stated that customer satisfaction is extremely dynamic in nature and can
change any time based on the quality of products. Furthermore, if multiple high quality
brands are available in the same target area, the customers are more likely to be less
satisfied with one particular brand and switch brands frequently for purchasing products
of their choices. The author also explains that as per the general scenario, if a customer is
satisfied with the products purchased from a brand, he is more likely to avoid further
40

shopping for some period of time. In other words, achieving high customer satisfaction
actually inhibits the purchasing decision of the customer, especially in the retail sector.
Consumer satisfaction is deemed to impact their purchase intention within the retail
industry. Moreover, the idea of satisfying consumers tends to have an effective appeal
which makes it believe that consumer satisfaction might result in increased loyalty that
results in increased profit gain. For the retail organizations, consumer satisfaction is
turning out to be the guiding principle for maintaining marketing tactics along with
developing marketing conducts (Bowen and Chen McCain 2015). In the recent scenario,
the retail organizations are focusing on enhancing consumer satisfaction strategy for the
reason that consumers have increased chances to go for repurchase of the same product.
This research has been conducted about the relationship between brand loyalty,
customer satisfaction and consumer purchase decision. As per the findings from Saudi
Arabian companies, establishment of customer satisfaction and brand loyalty are two
major steps for enhancing the positive consumer purchase decision. In other words, the
findings described that if the customer is not loyal to the brand or not satisfied with the
products or services, he will change his decision to purchase products from the brand
easily and will switch to other brands that is evident more among Saudi Arabian
customers. Purchase decision of a consumer is defined as the process by which the
customer decides whether to buy or not to buy a product from a brand. According to the
findings, the purchase decision of a consumer in Saudi Arabia generally depends on a
wide range of factors like actual need of the product, product price, brand value,
importance and others. The success of a particular brand lies in the fact that it is able to
convince the consumers to purchase their products after making them satisfied through
services, quality of products, pricing policies and marketing strategies.
The research emphasizes that before brand loyalty, customer satisfaction and
other such factors, the primary factor that affects the customer purchase decision is the
economic status of the customers. The customers with huge amount of resources are more
likely to purchase branded products whereas the customers with limited resources will
settle only for non-branded local products. In that case, these customers will not exhibit
any brand loyalty characteristic and his purchase decision will be solely based on the
41

actual price of the product. According to the findings, marketing and promotional
strategies play major roles in determining the consumer purchase decision among the
Saudi Arabian consumers. From the research, it has been found that it is the natural
psychology of the Saudi Arabian customers to get attracted to the marketing and
promotional activities of brands that are well executed and attractive in nature as a whole.
The research uses the example of Apple – a smartphone brand that has become massively
popular around the world due to the world class marketing and promotional strategies
adopted by the company. These marketing strategies make the customers feel that these
specific products will be a status symbol for them and thus, they are more likely to
purchase the product from the brand.
The findings define brand loyalty as the preference of a buyer for a particular
brand of product irrespective of various other factors like product, quality, quantity and
others. Establishing brand loyalty is one of the main objectives of any business
organization as it significantly helps the company to overcome market competition. The
concept of brand preference is mainly applicable when there are similar products sold by
different brands in the same target market. In that case, if a customer prefers one
particular brand, he will purchase products from that particular brand only irrespective of
any other factors as long as they are not extremely negative (like extremely expensive
and non-affordable). The findings have explained the three main stages that build up
brand loyalty among the customers. These three stages are brand recognition, brand
preference and brand insistence. According to the findings, brand recognition is defined
as the awareness of the customer regarding the name, benefits and packages provided by
the brand. Building brand awareness is important in order to gain popularity and
customer trust. The findings also explained that extensive marketing campaigns are
essential to raise brand awareness among the potential customers. There are certain
primary conditions that are essential for building brand loyalty. The condition might be
superior quality of products provided by the company that enables the company to
establish reputation and gain the trust of the customers. Brand loyalty can only be built if
there is sufficient trust of the customer on that particular brand. Once brand loyalty is
developed, the company needs to maintain the same through various factors like adequate
quality of the products, pricing, customer support and others.
42

The collected data also show the importance of brand preference in building
successful brand loyalty. Furthermore, as per the findings, brand preference is a strong
indicator of the success of the marketing strategies of that particular brand. Brand
insistence is the final stage of brand loyalty in which the customer purchases products
from only that brand and does not accept any other alternative brands. Furthermore, at
this stage, the customer also recommends the brand to friends and family members thus
the brand gets automatically promoted by the regular customers. The findings define
customer satisfaction as the state of the customer when his requirements are met by the
products provided by the seller in terms of quality, price and quantity. However, on a
larger scale, customer satisfaction can be defined as the fulfilling of the requirements of
the customer base within a target region even during high competition in the market.
According to the findings, establishment of customer satisfaction is one of the primary
requirements for overall success of the business. Having a strong brand value provides
considerable commercial advantage to the organization. The customers within a
particular target region is always more inclined towards a strong brand rather than other
small and unknown brands due to the common perception that branded products are far
superior in quality than non-branded products. Moreover, having a strong brand value
also helps the company to forge partnerships with other brands for joint venture in the
market. Non branded companies are not able to enjoy this advantage. As a result, branded
companies grow much faster than non-branded companies. As per the findings, branding
does not only represents a particular company and its product but also the quality of the
project. The products with reputed brands mostly ensure superior quality of products and
thus, building the trust of customers has become easier. Moreover, once the brand value
of a company is sufficiently built, there is no option for the company to compromise with
the quality of the products as it will lead to quick decline of the brand value.
Most of the non-branded products are sold through numerous supply chains. After
the products are manufactured, it is sent through several stages of suppliers to wholesaler
and finally to the retailer. However, branded products are generally sold by the
manufacturers themselves from their own specific stores. As a result, the supply chain
costs and issues are greatly reduced.
43

There are many customers in Saudi Arabia who believe owning products from
certain brands represents a symbol of status and aristocracy. Some of the real world
examples include a car from Mercedes, clothes and other products from Emporio Armani
or Ralph Lauren, smartphone from Apple and many others. This factor generates
happiness and psychological advantage to the customers and thus these brands are widely
popular around the world especially among the aristocratic classes. Specifically in Saudi
Arabia, these brands are highly regarded as massive status symbols to the native residents
of the country. The findings state that brand loyalty enhances the chances of the customer
to buy more products of the brand that he uses consistently. Brand loyalty enhances the
relationship between the customer and the specific company that sells the brand and
hence, it is proposed that brand loyalty has positive influence on the purchase decision of
the customer.
Consumer satisfaction and brand loyalty have been considered as important
marketing goals for the organizations in Saudi Arabia. Marketing professionals of the
country consider consumer loyalty to serve as a multidimensional process. It has been
already discussed that the concept of brand preference is mainly applicable when there
are similar products sold by different brands in the same target market. In that case, if a
customer prefers one particular brand, he will purchase products from that particular
brand only irrespective of any other factors as long as they are not extremely negative
(like extremely expensive and non-affordable). The findings have explained the three
main stages that build up brand loyalty among the customers in Saudi Arabia. These three
stages are brand recognition, brand preference and brand insistence. According to the
findings, brand recognition is defined as the awareness of the customer regarding the
name, benefits and packages provided by the brand. Building brand awareness is
important in order to gain popularity and customer trust. The findings also explained that
extensive marketing campaigns are essential to raise brand awareness among the
potential customers in Saudi Arabia. The findings have also discussed about the
importance of brand preference in building successful brand loyalty. Furthermore, as per
the findings, brand preference is a strong indicator of the success of the marketing
strategies of that particular brand in country. Brand insistence is the final stage of brand
loyalty in which the customer purchases products from only that brand and does not
44

accept any other alternative brands. Furthermore, at this stage, the customer also
recommends the brand to friends and family members thus the brand gets automatically
promoted by the regular customers. Consumer satisfaction as well as brand loyalty serves
as an emerging process which is deemed to serve as a major concern for which most of
the companies are highly profit sensitive. It has been gathered that consumer satisfaction
is considered to have a considerable impact on brand loyalty along with a real re-
purchase behavior of the brand results in long-term business profits. Focused on such
scenario, the current paper focuses on analyzing the ways in which brand loyalty and
consumer satisfaction impact their purchase decision within the retail industry. The major
objective behind the improvement is to observe the consumer purchase behavior that is
highly important in company’s performance along with maintaining sustainable growth
within a competitive environment.
45

Chapter 6: Conclusion and Recommendations
6.1 Conclusion
This research has been conducted about the relationship between brand loyalty,
customer satisfaction and consumer purchase decision. As per the findings from Saudi
Arabian companies, establishment of customer satisfaction and brand loyalty are two
major steps for enhancing the positive consumer purchase decision. In other words, the
findings described that if the customer is not loyal to the brand or not satisfied with the
products or services, he will change his decision to purchase products from the brand
easily and will switch to other brands that is evident more among Saudi Arabian
customers. Some authors have expressed their opinion that in order to gain brand success
in terms of finances, it is important for the company to develop a good brand image and
brand awareness. Brand image refers to the perception of a particular brand on the eyes of
customers. Some of the key success factors behind developing a brand image is an
attractive brand symbol design, a suitable name that reflects the ambition and nature of
the company, attractive products and others. On the other hand, brand awareness refers to
the idea of the people regarding what products can be purchased from a particular brand.
For instance, a customer with low brand awareness will not expect smartphones from
“Apple” brand. Some researchers have introduced the concept of brand management that
helps a company to grow brand efficiency and brand loyalty of the customer. Some of
common brand management techniques deployed by the companies include advertising
campaigns, distribution of free samples, quality management of the products before
dispatch and others. Generally, the aim is to ensure the customers feel the qualities and
prices of the products are reasonable as well as value for money. With time, as brand
efficiency increases, brand loyalty among the customers also increases that in turn
influences the purchase decision of the customers. Some researchers pointed out the
example of some brands like Apple and have stated that once the company has earned
very high brand value and strong brand loyalty among the customers, they are free to
increase products costs and change other factors and still not risk losing customers. This
is because their brand values are so strong that the customers will always have top
46

preference towards purchasing products only from that brand irrespective of the presence
of alternative cheap products from other brands. The researchers have emphasized that
the most popular and successful brands will always look to ensure fulfilling the
requirements of the customer and make their business customer centric. The advantage of
this approach is that it enables the companies to gain brand loyalty and satisfaction of the
customers. Brand efficiency of a product is directly related to brand loyalty and customer
satisfaction and can be defined as the ratio of brand output and brand input. In other
words, brand efficiency is the amount of brand output that is generated against the inputs
made towards the development of the brand. Brand loyalty of a customer can only be
developed when the company is able to generate high brand efficiency. In order to
increase brand efficiency, it is important for the company to control spending and also
generate sufficient amount of revenue through sales. Now, for achieving high sales and
earn significant profit margin, the company must ensure the customer base is loyal
towards the brand and satisfied regarding the products they receive. Majority of
customers look to ensure they receive high value for money in terms of product quality,
quantity and service.
The research emphasizes that before brand loyalty, customer satisfaction and
other such factors, the primary factor that affects the customer purchase decision is the
economic status of the customers. The customers with huge amount of resources are more
likely to purchase branded products whereas the customers with limited resources will
settle only for non-branded local products. In that case, these customers will not exhibit
any brand loyalty characteristic and his purchase decision will be solely based on the
actual price of the product. According to the findings, marketing and promotional
strategies play major roles in determining the consumer purchase decision among the
Saudi Arabian consumers. From the research, it has been found that it is the natural
psychology of the Saudi Arabian customers to get attracted to the marketing and
promotional activities of brands that are well executed and attractive in nature as a whole.
The findings cited the example of Apple – a smartphone brand that has become massively
popular around the world due to the world class marketing and promotional strategies
adopted by the company. These marketing strategies make the customers feel that these
specific products will be a status symbol for them and thus, they are more likely to
47

purchase the product from the brand. Purchase decision of a consumer is defined as the
process by which the customer decides whether to buy or not to buy a product from a
brand. According to the findings, the purchase decision of a consumer in Saudi Arabia
generally depends on a wide range of factors like actual need of the product, product
price, brand value, importance and others. The success of a particular brand lies in the
fact that it is able to convince the consumers to purchase their products after making them
satisfied through services, quality of products, pricing policies and marketing strategies.
The findings define brand loyalty as the preference of a buyer for a particular
brand of product irrespective of various other factors like product, quality, quantity and
others. Establishing brand loyalty is one of the main objectives of any business
organization as it significantly helps the company to overcome market competition. Most
of the non-branded products in Saudi Arabia are sold through numerous supply chains.
After the products are manufactured, it is sent through several stages of suppliers to
wholesaler and finally to the retailer. However, branded products are generally sold by
the manufacturers themselves from their own specific stores. As a result, the supply chain
costs and issues are greatly reduced. The concept of brand preference is mainly
applicable when there are similar products sold by different brands in the same target
market. In that case, if a customer prefers one particular brand, he will purchase products
from that particular brand only irrespective of any other factors as long as they are not
extremely negative (like extremely expensive and non-affordable). The findings have
explained the three main stages that build up brand loyalty among the customers. These
three stages are brand recognition, brand preference and brand insistence. There are many
customers in Saudi Arabia who believe owning products from certain brands represents a
symbol of status and aristocracy. Some of the real world examples include a car from
Mercedes, clothes and other products from Emporio Armani or Ralph Lauren,
smartphone from Apple and many others. This factor generates happiness and
psychological advantage to the customers and thus these brands are widely popular
around the world especially among the aristocratic classes. Specifically in Saudi Arabia,
these brands are highly regarded as massive status symbols to the native residents of the
country.
48

The findings state that brand loyalty enhances the chances of the customer to buy
more products of the brand that he uses consistently. Brand loyalty enhances the
relationship between the customer and the specific company that sells the brand and
hence, it is proposed that brand loyalty has positive influence on the purchase decision of
the customer. According to the findings, brand recognition is defined as the awareness of
the customer regarding the name, benefits and packages provided by the brand. Building
brand awareness is important in order to gain popularity and customer trust. The findings
also explained that extensive marketing campaigns are essential to raise brand awareness
among the potential customers. There are certain primary conditions that are essential for
building brand loyalty. The condition might be superior quality of products provided by
the company that enables the company to establish reputation and gain the trust of the
customers. Brand loyalty can only be built if there is sufficient trust of the customer on
that particular brand. Once brand loyalty is developed, the company needs to maintain the
same through various factors like adequate quality of the products, pricing, customer
support and others.
The collected data also show the importance of brand preference in building
successful brand loyalty. Furthermore, as per the findings, brand preference is a strong
indicator of the success of the marketing strategies of that particular brand. Brand
insistence is the final stage of brand loyalty in which the customer purchases products
from only that brand and does not accept any other alternative brands. Furthermore, at
this stage, the customer also recommends the brand to friends and family members thus
the brand gets automatically promoted by the regular customers. The findings define
customer satisfaction as the state of the customer when his requirements are met by the
products provided by the seller in terms of quality, price and quantity. However, on a
larger scale, customer satisfaction can be defined as the fulfilling of the requirements of
the customer base within a target region even during high competition in the market.
According to the findings, establishment of customer satisfaction is one of the primary
requirements for overall success of the business. Having a strong brand value provides
considerable commercial advantage to the organization. The customers within a
particular target region is always more inclined towards a strong brand rather than other
small and unknown brands due to the common perception that branded products are far
49

superior in quality than non-branded products. Moreover, having a strong brand value
also helps the company to forge partnerships with other brands for joint venture in the
market. Non branded companies are not able to enjoy this advantage. As a result, branded
companies grow much faster than non-branded companies. As per the findings, branding
does not only represents a particular company and its product but also the quality of the
project. The products with reputed brands mostly ensure superior quality of products and
thus, building the trust of customers has become easier. Moreover, once the brand value
of a company is sufficiently built, there is no option for the company to compromise with
the quality of the products as it will lead to quick decline of the brand value.
According to the views presented in the research, it is gathered that consumer
satisfaction is generally used as a predictor of the upcoming customer purchases.
Satisfied consumers are considered to have an increased opportunity to go for repeat
purchases at the time of recommending that other try the satisfaction source. Moreover,
because of increased brand loyalty, the consumers tend to be associated to their desired
brand in choosing their products. The research defines consumer retail loyalty as an
increased commitment of the consumers for repurchasing a desired retail establishment,
despite certain situational impacts along with marketing efforts. This is also observed to
have effective potential to result in consumers switching behavior to the alternative retail
companies. With increasing competition in the global retail industry, the grocery retailers
in Saudi Arabia realize the aspects those are the determinant value based attributes which
is deemed vital by the consumers at the time of analyzing the retailers or grocery
shopping stores. It is deemed to be imperative that grocery retailers realize that there are
three factors affecting consumer purchase intention based on their brand satisfaction
(Çifci et al. 2016). This encompasses physical factors that include functional aspects such
as comfort, layout and privacy along with aesthetic factors like color, architecture,
materials as well as style of the store.
The grocery retailers in Saudi Arabia need to enhance consumer satisfaction
continuously so that it indicates a central strategic focus for the consumer focused
companies. This is for the reason that the satisfied consumers tend to develop positive
attitudes that light impact the consumer loyalty resulting in frequent purchases, increase
50

in purchase volume along with purchase of other services or goods provided by the retail
companies. Retail consumers in distinct nations might expect as well as perceive distinct
level and types of service encounters. For this reason, there is an increased requirement to
analyze the difference between consumers perceived value in distinct areas of the retail
market.
Retention is considered to be important in maintaining consumer loyalty and the
retail networks in Saudi Arabia are making attempts to attain increased competitive
advantage through increasing value by means of loyalty and efficiency. As sales
promotions has turned out to be an integral aspect within the retail supply chain planning,
consumer behavioral aspects based on loyalty and the service operations in retail
companies are increasingly challenged. Consumer satisfaction as well as brand loyalty
serves as an emerging process which is deemed to serve as a major concern for which
most of the companies are highly profit sensitive. The major objective behind the
improvement is to observe the consumer purchase behavior that is highly important in
company’s performance along with maintaining sustainable growth within a competitive
environment. Brad loyalty facilitates the retail companies to differentiate its business
from its business rivals. Retail brands focus on increasing consumer loyalty in order to
attain positive consumer response that can further enhance their purchase intention
towards the retail brands. The departmental stores of Saudi Arabia offer quality
commodities because of which brand loyalty of the consumers get increased and hey
generate a commitment to repurchase the brand. Consumer satisfaction increases brand
awareness that further enhances brand equity and in the retail industry corporate
executives are considering it to be competitive in increasing communication and contact
among the organization and the related consumers.
Brand name awareness has a vital role in consumer decision making for the
reason that in case the consumers have heard about a brand name, they tend to feel highly
comfortable in purchase decision making. Consumers of the retail sector tend to purchase
brands with those they are similar with and along with that brand awareness is
accountable for generating strong emotional bonds with the retail brands.
51

Saudi Arabia retail industry is anticipated to grow with CAGR of around 7.5%, in
terms of value over the years 2017 to the year 2022. Increase in culturally diversified
population existence of an increasingly stable market despite dependence on dropping oil
economy along with increased number of construction projects are observed to increase
the retail market in Saudi Arabia. There are certain factors within the industry that is
anticipated to increase the demand for retail in the upcoming five years. A drastic shift in
the Saudi Arabia trail industry is associated with providing importance to the modern
trade. It is evident that, consumers seek out alternative means of attaining provisions that
has resulted in permanent changes within the shopping behavior of consumers. Huge
retail operations within several formats are dominating the industry along with that
competition within the retail market is increasing steadily in the emerging nation.
Consumer satisfaction and brand loyalty have been considered as important
marketing goals for the organizations in Saudi Arabia. Marketing professionals of the
country consider consumer loyalty to serve as a multidimensional process. It has been
already discussed that the concept of brand preference is mainly applicable when there
are similar products sold by different brands in the same target market. In that case, if a
customer prefers one particular brand, he will purchase products from that particular
brand only irrespective of any other factors as long as they are not extremely negative
(like extremely expensive and non-affordable). The findings have explained the three
main stages that build up brand loyalty among the customers in Saudi Arabia. These three
stages are brand recognition, brand preference and brand insistence. The trend in the
direction of efficient convenience observed Bin Dawood Group to turn out to be the first
Saudi grocery retailer in launching a Smartphone application in the year 2016 that
facilitates its consumers to place orders for its brand in online medium. From the retail
industry report analysis of Saudi Arabia, it has been gathered that independent small
grocers are anticipated to remain popular but decreasing choice for the Arabian
consumers. Hypermarkets and supermarkets are also set for registering increasing growth
rates within the grocery retailers over the forecasted period with respective value CAGRs
of 5% as well as 6% considerably at constant 2017 prices. At the end of the year 2017, e-
commerce emerged within the new channels within Saudi Arabian retailing. This is
particularly correct within the grocery retailing with Bin Dawood, Al Raya and Panda
52

Retail Co launching online grocery shopping within their websites or within their
individual shopping within their websites or their individual applications. It is also
observed within the Saudi Arabia, such shift is anticipated to offer 20000 employment
chances for the nationals within the grocery retailers as an aspect of the nation’s
enhancing marketing approach. According to the findings, brand recognition is defined as
the awareness of the customer regarding the name, benefits and packages provided by the
brand. Building brand awareness is important in order to gain popularity and customer
trust. Retail industry of Saudi Arabia is observed to boom for the reason that the nation
offers the retail markets to provide the investors and developers with unique selling
proposition. Driven by exceptional fundamentals encompass population growth along
with increased percentage of young generation. This is related with increasing disposable
income, listed entertainment options along with harsh climates because of which the
retailers and developers with effective retail performance. An evaluation of the major
factors that increases the retail space demand particularly the malls, it facilitates in
estimating the future growth trends. It is also observed that strong fundamental of Saudi
Arabia are highly contributing towards positive viewpoint on the retail sector of the
nation. From the analysis of speeding pattern of consumers within Saudi Arabia retail
industry it has been gathered that the national brands are familiar and offer increased
quality assurance in generating consumer loyalty. Moreover, 49% of the Saudi Arabian
consumers are deemed to be loyal to the branded offerings. Poor quality perceptions
along with enhanced brand loyalty can impose several barriers to the growth of private
label retail companies.
The findings have also discussed about the importance of brand preference in
building successful brand loyalty. Furthermore, as per the findings, brand preference is a
strong indicator of the success of the marketing strategies of that particular brand in
country. Brand insistence is the final stage of brand loyalty in which the customer
purchases products from only that brand and does not accept any other alternative brands.
Furthermore, at this stage, the customer also recommends the brand to friends and family
members thus the brand gets automatically promoted by the regular customers. Consumer
satisfaction as well as brand loyalty serves as an emerging process which is deemed to
serve as a major concern for which most of the companies are highly profit sensitive. It
53

has been gathered that consumer satisfaction is considered to have a considerable impact
on brand loyalty along with a real re-purchase behavior of the brand results in long-term
business profits. There are certain major players those operate their business within the
Saudi Arabia retail market and these include Amazon, Wall-mart, Lulu Group, Spinney’s,
Carrefour, Al Raya, Fu-Com and Al Sadan and many more. From the data gathered from
the industry experts it has been found that the historical sales data of the respective
retailers to attain an overall market size. Saudi Arabia retail market includes the exclusive
stores, supermarket, specialty retailers, and general merchandise stores along with the
non-store retailers. Market by geography for the Saudi Arabia retail sector includes
Central, Western, Eastern, Northern and the Southern region. Saudi Arabia retail sector
has a population of approximately 33 million individuals existing within the kingdom.
The grocery retail market grew by 5% per year in value terms from the year 2012 to the
year 2018. Traditional grocery retailers of Saudi Arabia continue to be a vital aspect of
grocery retail within Saudi Arabia majorly because of strong networks local family
departmental stores. This is anticipated for around 57% of the overall market and it is
decreasing with modern retail expansion. The total number of supermarkets and
hypermarkets is for around 1255 outlets or around 3% of the over the overall retail
outlets. These account for 37% over of overall grocery sales within the nation. In the
retail market of Saudi Arabia, Lulu Hypermarket also expanded their chains by adding
new outlets. Certain supermarkets chains like Farm Superstores along with Al Jazeers
Supermarkets are developing effective expansion programmers that is considering to
increasing the accessibility of imported brands. The findings also explained that extensive
marketing campaigns are essential to raise brand awareness among the potential
customers in Saudi Arabia. Focused on such scenario, the current paper focuses on
analyzing the ways in which brand loyalty and consumer satisfaction impact their
purchase decision within the retail industry. The major objective behind the improvement
is to observe the consumer purchase behavior that is highly important in company’s
performance along with maintaining sustainable growth within a competitive
environment.
From the study of the sample size in Saudi Arabia, as evident from the survey
presented above, it can be said that the first hypothesis is only partially true. The people
54

surveyed in this research have showed through the survey they do not have absolutely
loyalty towards one particular brand and prefer to purchase products from different
brands. On the other hand, their purchase decisions are not influenced by any brand
loyalty factor as they purchase products from different brands as they feel necessary. The
survey results conducted among the people in Saudi Arabia state that they prefer value
for money for the products they purchase and moreover, they are not satisfied with one
particular brand. As a result, they purchase from different brands for the products when
they find them value for money as well as other favorable possible factors like trend,
popularity, cost and others. Furthermore, it has also been found that they do not have any
particular preference for only branded products as they have stated that they purchase
from local companies as well. From this, it can be derived that as long as they are
satisfied, they will continue to purchase products from both international and local
brands. Thus, contrary to the second research hypothesis, from the research, it has been
derived that customer satisfaction actually has positive impact on the consumer purchase
decision. Thus the second research hypothesis is not true for the test case area in Saudi
Arabia.
From the research in Saudi Arabia, it has been found that consumer satisfaction as
the most important strategy of the retail companies for significant along with sustained
marketing performance and it is important within the marketing concept. Within the
academic literature, the brand loyalty and consumer satisfaction model has a long record
for frequently purchasing retail products. The findings state in the current day market in
Saudi Arabia, competition is increasing at a lightning pace. In addition to local and small
brands, several large and multinational brands are also competing over similar products.
The findings from Saudi Arabia include the theme of customer satisfaction and
determined whether it is a static or dynamic variable. According to the works published
by researchers, they stated that customer satisfaction is extremely dynamic in nature and
can change any time based on the quality of products. Furthermore, if multiple high
quality brands are available in the same target area, the customers are more likely to be
less satisfied with one particular brand and switch brands frequently for purchasing
products of their choices. The author also explains that as per the general scenario, if a
customer is satisfied with the products purchased from a brand, he is more likely to avoid
55

further shopping for some period of time. In other words, achieving high customer
satisfaction actually inhibits the purchasing decision of the customer, especially in the
retail sector. Consumer satisfaction is deemed to impact their purchase intention within
the retail industry. Moreover, the idea of satisfying consumers tends to have an effective
appeal which makes it believe that consumer satisfaction might result in increased loyalty
that results in increased profit gain. For the retail organizations, consumer satisfaction is
turning out to be the guiding principle for maintaining marketing tactics along with
developing marketing conducts. In the recent scenario, the retail organizations are
focusing on enhancing consumer satisfaction strategy for the reason that consumers have
increased chances to go for repurchase of the same product.
6.2 Recommendations
Based on the research conducted on the topic and the data found from interview
and questionnaire survey, the following recommendations can be developed for the retail
industry in Saudi Arabia.
Brand Loyalty – The retail companies in Saudi Arabia should focus more on
developing brand loyalty on the existing customers. From the survey, it has been found
that majority of the customers are not loyal to a particular brand and are always
purchasing products from different brands depending on the market price and trend.
Since most of the companies are always having strong competition among themselves,
they are always changing their products as per the trends and continue to research on
development of new products. However, as evident from the data, most of the companies
do not sufficiently invest in marketing techniques that are essential for developing brand
loyalty among the customers. Thus, majority of the population in the country is not loyal
to any particular brand.
Customer Satisfaction – As already discussed in the research, customer
satisfaction plays a significant role in determining the purchase decision of a customer in
the retail industry. Thus, the retail companies in Saudi Arabia must focus on generating
customer satisfaction in order to develop favorable purchase decision of the customers
towards their products. Before the survey, it was expected that the customer will prefer to
purchase only branded products over local products due to superior quality and other
56

products. However, from the data generated from survey, majority of the participants
have stated that they do not have such strong preference towards branded products and
also they do not consider branded products to be superior to local products. This signifies
that there is no certain amount of customer satisfaction among the customers regarding
certain branded products and thus, they purchase from both branded and local companies
throughout the year based on certain factors.
6.3 Research Limitations
While the research has been focused on researching customer purchasing behavior
in Saudi Arabia, there are several limitations that have altogether reduced the overall field
of research and thus the validity of the data if the global scenario is considered. The
limitations of the research are as follows.
Scope of the Research – Due to the limitation of the academic environment, the
scope of the research has been significantly limited. Even though the research field was
reduced from global context to only Saudi Arabia, it has not been possible to conduct the
research throughout the country. Thus, the scope of the research has been limited to only
a particular region of the country and thus, the data results published in the research
cannot be absolutely true for the entire national context, let alone global context.
Demographics – Due to several national and political factors in the selected
country, uniform demographic data could not be collected. Thus there are some
anomalies regarding the demographic data collected during the questionnaire survey.
Sample Size – Due to the limitation of scope of the research, the sample size for
the interview and questionnaire survey is very much insignificant if the national context
is considered. This further emphasizes the fact that the collected data is not absolutely
true for the entire country. The sample size for this research reflects only a limited area
that has been covered through this research.
6.4 Linking with Objectives
The objectives of the project were determined as follows.
57

 To analyze the brand loyalty impact on consumer purchase decision within
the Saudi Arabia retail industry
 To evaluate the impact of consumer satisfaction factors on consumer
purchase decision making in Saudi Arabia retail industry
 To analyze the role of retail brand performance through enhancing
consumer satisfaction and loyalty
 To investigate the function of brand efficiency in improving consumers
purchase intention
From the study conducted in the research, it has been found that brand loyalty
does not have much impact on the customer purchase decision in the Saudi Arabia retail
industry. The customers have more focus on the quality and price of the product rather
that the branding.
It has been found from the research that customer satisfaction plays an important
role in the consumer purchase decision making in the retail industry in Saudi Arabia. The
customers of Saudi Arabia will never purchase any product from a company if they are
not satisfied with the products.
Retail brand performance is an insignificant factor in Saudi Arabia retail industry.
As per the analysis, people focus on the quality rather than the brand of the product and
hence, brand performance is irrelevant.
Brand efficiency can improve customer purchase intention in the country if only
the brands focus on the quality of the products and can reach the customers whenever
required.
6.5 Future Scope of Research
This research covers only a limited field of study regarding brand loyalty,
customer satisfaction and customer purchase decision in Saudi Arabia. As discussed
above, there are multiple limitations to the research as it seeks the required answers to the
58

research questions within a very small target area as compared to the global context. On
the other hand, the field of research is significantly large as the retail industry is a global
phenomenon rather than regional. Thus, there is endless scope for future research on this
particular research. Possible future research can focus on some other countries where
retail industries work differently or even on a global context if the scope of the research is
sufficiently high.
59

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