Dissertation: Customer Loyalty Programs in Beauty & Health Retailing

This dissertation investigates the relationship between customer loyalty programs and store loyalty within the beauty and health retailing industry in Hong Kong. The research explores the competitive landscape, cultural context, and distribution channels specific to the region, considering the influe...Read More

DISSERTATION
(Measuring impact of customer loyalty programs & Mediating factors on
store loyalty: The beauty and health retailing stores in Hong Kong)

Table of Contents
INTRODUCTION...........................................................................................................................1
1 1.1 Background...................................................................................................................1
1.1.1 Hong Kong Special Administrative Region.........................................................2
1.1.2 Culture in Hong Kong..........................................................................................3
1.1.3 Context of Beauty & Health Care Products.........................................................4
1.1.4 Distribution Channels in Hong Kong..................................................................5
1.2 Justification of Proposed Research..................................................................................6
1.2.1 Importance of Customer Loyalty Programs in Beauty & Health Care Products
retailing context in Hong Kong.....................................................................................7
1.2.2 Price Sensitivity in Chinese Society....................................................................8
1.3 Aim & Objectives............................................................................................................9
1.4 Research Questions.......................................................................................................12
1.5 Intended Research Methodology...................................................................................14
1.6 Outline of Dissertation..................................................................................................17
2.0 LITERATURE REVIEW........................................................................................................18
2.1 STORE LOYALTY.......................................................................................................18
2.1.1 Behavioural Action............................................................................................22
2.1.2 Word-of-mouth .................................................................................................23
2.1.3 Commitment ......................................................................................................25
2.2 CUSTOMER LOYALTY PROGRAMMES................................................................27
2.2.1 General History..................................................................................................28
2.2.2 Hard Attributes ..................................................................................................30
2.2.3 Soft Attributes ...................................................................................................32
2.2.4 Impacts of Customer Loyalty Programmes on Store Loyalty............................33
2.3 COMMUNICATIONS WITH CUSTOMERS..............................................................37
2.3.1 Illustration of Communication with Customers.................................................37
2.3.2 Association with Store Loyalty..........................................................................38
2.4 VISUAL MERCHANDISING.....................................................................................39
2.4.1 Content of Visual Merchandising......................................................................39
2.4.2 Connection to Communication with Customers................................................40

2.5 Development of Hypotheses..........................................................................................41
2.6 Development of Research Model..................................................................................43
2.6.1 Review of the Parental Frameworks..................................................................44
2.6.2 Proposed Model in Current Study......................................................................45
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................48
3.1 Introduction...................................................................................................................48
3.2 Research methodology..................................................................................................49
3.3 Research design.............................................................................................................50
3.3.1 Type of research design.....................................................................................51
3.3.2 Research methods..............................................................................................52
3.3.3 Survey research..................................................................................................52
3.3.4 Sampling............................................................................................................53
3.3.5 Questionnaire.....................................................................................................54
3.3.6 Product Categories.............................................................................................54
3.3.7 Research Framework..........................................................................................54
3.4 Data Collection..............................................................................................................55
3.4.1 Demographic Information .................................................................................57
3.4.2 Store Loyalty......................................................................................................59
3.4.3 Customer Loyalty Program................................................................................61
3.4.4 Price Sensitivity.................................................................................................62
3.4.5 Communication with Customer.........................................................................63
3.4.6 Visual Merchandisin..........................................................................................63
3.4.7 Price Image........................................................................................................64
3.4.8 Location.............................................................................................................64
3.5 Measures........................................................................................................................65
3.7 Validity..........................................................................................................................66
3.8 Ethical considerations....................................................................................................67
3.9 Significance and Limitation of research design............................................................67
3.10 Conclusion...................................................................................................................67
CHAPTER 4: DATA ANALYSIS................................................................................................69
4.1 Introduction...................................................................................................................69

4.2 Descriptive analyses......................................................................................................69
4.3 Frequencies tables.........................................................................................................72
4.4 Cronbach's alpha test.....................................................................................................86
4.5 Chi square test and cross tabulation..............................................................................87
4.6 Mediation and moderation analayses through process macro.......................................90
4.7 Summary of hypotheses results.....................................................................................93
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS ..................................................95
5.1 Introduction...................................................................................................................95
5.2 Findings.........................................................................................................................95
5.3 Decision stage................................................................................................................98
5.4 Summary of findings...................................................................................................102
5.5 Recommendations.......................................................................................................104
5.6 Limitation and direction for future research................................................................104
5.7 Summary and conclusion............................................................................................105
REFERENCES............................................................................................................................106
APPENDIX..................................................................................................................................125

INTRODUCTION
In the current research work, the connection between the customer loyalty program and
the store loyalty in the local beauty and health retailing industry was investigated so as to provide
the hints for the practitioners in the field of having a better understanding of their target groups
as well as the effectiveness of the customer loyalty program delivered. The related study also
provided the recommendation for the managers of the related industry in the conducting of the
loyalty program. Furthermore, the customers could be benefited from the related study by the
enhanced fulfilment to their expectation. It was hoped that the current study could provide
guidance for the owners of the retail industry of beauty and healthcare products in facing the
complicity and challenge of the sector.
Therefore, for the sake of having an improved illustration to the related content, the
current chapter was divided into six sections, namely, Background, Justification of Proposed
Research, Aim & Objectives, Research Questions, Intended Research Methodology, and Outline
of , so as to highlight the intended approach in conducting the current study along with the aim
and objectives in performing the related research investigation.
11.1 Background
Beauty and health care products were special in locals because of the intensified
competition, while a wide range of parties was involved in the sales channels. Most of them
dedicated for the function of marketing and sales (Australian Trade Commission, 2014), while
the lack of local manufactures heated the competition due to the similarity of functions
(Australian Trade Commission, 2014). To stand out, all distributors encouraged the sales with a
wide range of customer retaining campaign (Oliaee, et al., 2016), while the dynamics of the
market was unpredictable due to the interference of the resultant effects. Consequently, because
of the complexity of the background related to the local beauty and health care products retailing
industry, the related illustration was divided into four aspects, while they were presented in the
following four subsections, namely, Hong Kong Special Administrative Region, Culture in Hong
Kong, Context of Beauty and Health Care Products and Distribution Channels in Hong Kong
respectively.

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

1.1.2 Culture in Hong Kong
In Kroeber and Parsons (1958, p.583), the word culture was described as “……
Transmitted and created content and patterns of values, ideas, and other symbolic-meaningful
systems as factors in the shaping of human behavior and the artifacts produced through
behaviour.” Frey (2005, p.1) described the effect of culture values as “Learned, relatively
enduring, emotionally charged, epistemologically grounded and represented moral
conceptualizations that assist us in making judgments and in preparing us to act. In other words,
the priorities we set and the choices we make are significantly based on the (cultural) values we
hold.”
Traditional Chinese culture/Confucianism dominated Hong Kong before mid-19th century
till the invasion of Great Britain (Siu, et al., 2003). Chinese values emphasised the importance of
family unity over individualism (Abelmann, 1997). Binding a tight family required all members
to be polite and to show respect (Abelmann, 1997). Therefore, Chinese values emphasised on
personal courtesy and “face-giving” (Siu, et al., 2003). Although, Hong Kong had fallen as a
colony of Great Britain and it was said that western believes of individualism impacted the living
style of the citizen in Hong Kong (De Mooij, 2005); apart from Low Uncertainty Avoidance,
Hong Kong Citizen followed Confucianism in most of the area (please see table 1).
Confucianism emphasised on “Wulun”, a very strong hierarchy was formed between
father and son (Siu, et al., 2003). Father was the leader of the family and he inherited the right to
make the final decision (Siu, et al., 2003). Therefore, Hong Kong was found Masculinity and
Large Power Distance (Hofstede & Hofstede, 1997). Hong Kong was found collectivism because
Chinese emphasised the importance of family unity over individualism (Abelmann, 1997; De
Mooij, 2005; Hofstede, 1980). Confucianism believed that hard working to achieve significant
future rewards was a virtue; however, respecting “Wulun” hierarchy was equally important (Siu,
et al., 2003). As a result, Confucianism consisted the principles of both sides (Siu, et al., 2003;
Hofstede & Hofstede, 1997). Lastly, Low Uncertainty Avoidance could be attributed to the
western culture of entrepreneurship. As a result, Hong Kong culture was willing to try new
products and to sacrifice short-term interests so as to achieve long-term rewards (Siu, et al.,
2003; Hofstede & Hofstede, 1997). Therefore, this study targeted to investigate the impact of
customer loyalty program had on store loyalty in Hong Kong.

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

traditional medicine, probiotics, homoeopathic medicine, and amino acids, and so on, were
commonly considered as health products (Answers Cloud, 2016).
1.1.4 Distribution Channels in Hong Kong
Due to the complicated processes from the suppliers to the users as well as the scratted
consumption in nature (Harris, 2000; Johnson, 1999). The distribution channel had been
developed in the local market, while it has been summarised in the following figure (1.1). A
wide range of parties involved in the sales channels: Department and Specialty Stores, Chains,
Supermarkets etc. (Australian Trade Commission, 2014) and these parties were selling similar
foreign branded products, given the situation of a lack of local manufacturers, product
differentiation was less useful to attract customers (Australian Trade Commission, 2014; Oliaee,
et al., 2016).
From the related statistics, the sales of high-end and international branded products were
concentrated in the department stores, while speciality stores focused on dedicated brands
(Australia Trade Commission, 2014). Additionally, middle to low-end products can be found in
chain stores, chain pharmacies and supermarkets (Australian Trade Commission, 2014). Foreign
branded homogeneities offered in department stores and speciality stores largely reduced the
switching costs of customers (Australian Trade Commission, 2014; Oliaee, et al., 2016);
Therefore, from the related structure, the loyalty program was commonly happening in
department stores and speciality stores (Hoch, et al., 1999; Zboja & Voorhees, 2006; Mitchell,
2008).
Main Supplier
↓ ↓ ↓
Department Stores
1. Lab Concept
2. Harvey
Specialty
Stores
1. Angel
Distributor /
Agent

Nichols
3. Joyce Beauty
4. Lane
Crawford
2. Aster
3. Colormix
4. Bonjour
5. Sa Sa
↙ ↓ ↓ ↓ ↓
Department Stores on
Concession Arrangement
1. Sogo
2. UNY / APITA / PIAGO
3. Yata
4. Wing On
5. AEON
6. City Super / Logon
Chain
Pharmacie
s
1. Wats
ons
2. Mann
ing’s
Supermark
ets
1. Parkn
Shop
2. Wellc
ome
Concept
Store
1. An
umi
2. Aes
op
3. Jurl
iqu
e
Multi-brand
Shops
1. Mekim
2. Nest
Beauty
Figure 1.1: Distribution Channel of Health & Beauty Product in Hong Kong (Australian Trade
Commission, 2014)
1.2 Justification of Proposed Research
As mentioned above, it can be seen that the related investigation can gain the
understanding about the effect of customer loyalty in the retention of the loyalty, while it was
valuable to the operators of the related companies. Additionally, due to the switching of the
target consumers for the sellers of the local beauty and health care products, the repurchasing
was one of the key issues to the practitioners, while it also highlighted the importance of the
study for the customer loyalty program.

1.2.1 Importance of Customer Loyalty Programs in Beauty & Health
Care Products retailing context in Hong Kong
Customer loyalty could be interpreted as a consistent re-patronize behaviour from a
customer in the same store or to the same brand disregarding competitors marketing to effort to
attract customer to switch to other brand and location on the one hand and on the others that
customer was willing to recommend the brand and location among friends and colleagues
(Oliver, 1999; McIlroy & Barnett, 2000). Customer loyalty stimulated consistent re-patronize
behaviour because loyal customers were less vulnerable to negative word-of-mouth to their loyal
brand and store location and they were hard to be attracted by other alternatives (Ou, et al.,
2011).
Nonetheless, the blooming of the field was highly affected by the economic factors
(Viola, et al., 2013). Therefore, the improved customer loyalty was an essential way for the
companies in retaining the clients so as to keep their market share (Oliver, 1999; Bhattacharya &
Sen, 2003). Given the highly competitive distribution channels of retailing industry, beauty and
healthcare products were without exception, while they should maintain the local customers so as
to stay their market occupancy. Product differentiation was less useful to attract customers when
foreign branded homogeneities offered by distributors largely reduced the switching costs of
customers (Australian Trade Commission, 2014; Oliaee, et al., 2016); therefore, distributors
encouraged sales with a wide range of customer retaining campaigns and marketing techniques
such as: customer loyalty program, visual merchandising and selection of suitable location
(Australian Trade Commission, 2014; Oliaee, et al., 2016) to improve customer loyalty to store
(Bhattacharya & Sen, 2003; Oliver, 1999).
Take an example, the reward or discount was provided to the returned customers
(Barlow, 1996; Capizzi & Furguson, 2005), while the special treatment for the repurchasing
consumers could be observed as well (Barlow, 1996; Harris, 2000). All of them are with the
objectives of staying the customers in keeping their consumption to the products. Although
quality and price may be two of the keys, the two factors are hard to be alternated due to the high
competition. As a result, the customer retention programs and marketing techniques seem the last
resort for the owners in beauty and health products retailing industry to compete with the store
loyalty among the customer base.

1.2.2 Price Sensitivity in Chinese Society
Price was a cue/indicator to measure quality of products and services in different
societies (Dawar & Parker, 1994; Probert & Lasserre, 1997; McGowan & Sternquist, 1998), but
the degree to which buyers depend on price to measure quality was different (Le Claire, 1992;
Tan & McCullough’s, 1985) as well as the value for quality (Kim, et al., 2002). In the study of
examining the relationship between product quality and patronise decision in apparel retailing,
Chinese preferred products with more functions compare to South Korean (Kim, et al., 2002).
Kim et al (2002) attributed the result to the difference in culture. Chinese were less
individualistic compare to South Korean; therefore, the extrinsic value was more important to
attract customer in Chinese society.
Given that collective culture relied heavily on word-of-mouth feedbacks from
interpersonal networks to valuate a product, higher extrinsic values (products of a lower price
with the same function or more functions) rasied the chances of positive word-of-mouth in
Chinese society that gradually translated to higher degree of acceptance to buy the product
(Schutte & Ciarlante, 1998).
Moreover, in the study of Le Claire (1992) and Tan & McCullough’s (1985), a society
like Hong Kong which shared deeper Chinese beliefs was found more price oriented in making
patronise decision. As a result, price sensitivity can be viewed as a part of the mechanism of
customer loyalty programs that affect store loyalty of a brand.
1.2 Justification of Proposed Research
As mentioned above, it can be seen that the related investigation could gain the
understanding about the effect of customer loyalty in the retention of the loyalty, while it is
valuable to the operators of the related companies. Additionally, due to the switching of the
target consumers for the sellers of the local beauty products, the repurchasing is one of the key
issues to the practitioners, while it also highlights the importance of the study for the customer
loyalty program.

1.3 Aim & Objectives
Consequently, after the completion for the brief illustration to the situation of the local
healthcare and beauty retailing industry and the common skills in retention of the customers, the
current work was defined in accessing the dynamics between the customer loyalty program and
the store loyalty so as to generate the practical recommendation for the practitioners in the
related fields as well as to enhance the user experience for the related stores. Hence, for the sake
of achieving the related goal, seven objectives have been developed, while they canbe
summarised in the corresponding statements.
1. To gain an updated access to the local retail industry related to beauty and health care
related products
2. To have a review of the model in characterising the connection between the loyalty program
and the improvement of the customer loyalty
3. To identify the related factors that may be affecting the store loyalty
4. To suggest a model and research framework in linking all factors identified from the
previous step along with the support from the available literature
5. To establish the connections among the factors with the collected information from the
primary study
6. To give recommendation for the practitioners in the related field in order to improve their
effectiveness of loyalty program and the satisfaction of the customer by fulfilling their
expectation
PRICE SENSITIVITY
Then, the price sensitivity as a moderator between the customer loyalty programmes and store
loyalty was investigated, while the corresponding illustration was started with a general
definition so as to provide the discussion for the moderation effect of price sensitivity among
customer in affecting the store loyalty under the influence of customer loyalty programmes.
General Definition

In the customer loyalty program, the rewards to the customer were illustrated as the translation of
benefits and advisable behaviour of the customers to the firm (Yi & Jeon, 2003). However, the
resistance or assistance of the customers in conducting the advisable behaviour should be
different after receiving the related rewards (Narasimham, 1984; Shapiro & Varian, 1998).
Therefore, the consideration of the price sensitivity should be included so as to investigate the
difference between price sensitive customers and less/non-price sensitive customers
(Narasimham, 1984; Shapiro & Varian, 1998).
Price sensitivity could be viewed as the reaction of customers to a change of price and to regular
price (Goldsmith & Newell, 1997). Generally, given the same quality of products, the lower the
regular price, the more discount offered, the more attractive to customers (Gabor, 1988). Price
was a cue/implication on quality when customers faced imperfect/asymmetric information on
quality of product: branding, building materials, location of store and manufacturers, etc. and
new products: lack of past experiences and competitions to do comparison (Nagle & Holden,
2003). Therefore, customers were more willing to accept regular price (less/non-price sensitive)
and to purchase more on regular price (Suri & Manchanda, 2001; Nagle & Holden, 2003).
However, in a competitive market which information on the quality of products could be easily
attained, high price sensitive customers would like to repurchase on discount through a loyalty
program (Gabor, 1988; Suri & Manchanda, 2001; Nagle & Holden, 2003). On the other hand, the
customers with relatively low price sensitive would consider the related rewards could be spotted
in the future, so they would be unlikely in committing for the repurchasing due to the provision
of the discount offered (Narasimham, 1984; Shapiro & Varian, 1998; Shugan,1995).
Nonetheless, it should be noted that the price sensitivity only affected the decision of purchasing
under the alternation of the price. Therefore, the company who offered the rewards to the
customers might not yield the same effect to the price discount. As a result, the marketers were
advised to provide the mix marketing strategy so as to suit the related needs for the customers
(Narasimham, 1984; Shapiro & Varian, 1998).
Moderation Effect between Customer Loyalty Programmes & Store Loyalty

The researchers in the related field also confirmed that the price sensitive persons would like to
shop after receiving a discount, while the price-insensitive people would like to purchase after
getting rewards instead of price reduction (Leong, 2013). Price sensitive customers were more
likely to repeatedly purchase when the firm offered discount through loyalty program and price-
insensitive customers or customers who treasured rewards other than discount would not be
affected by the discount scheme offered by the loyalty program; therefore, marketer could
change their marketing mix and offerings to cope with the needs of different kind of customers:
physical/economic rewards on price sensitive customers and more psychological/emotional
rewards on price-insensitive customers (Narasimham, 1984; Shapiro & Varian, 1998). As a
result, there was a possibility that it was true that the price sensitivity had a strong moderation
effect to the store loyalty after the customer received the discount from the customer loyalty
program (Leong, 2013; Narasimham, 1984; Shapiro & Varian, 1998).
In the study of Cortiñas et al. (2008) and Demoulin & Zidda (2008) on the effect of a loyalty
program, they discovered a significant difference in price sensitivity between program holders
and non-holders. Holders who satisfied with rewards achieved from loyalty program were found
price insensitive to regular price, and they also patronise bigger basket size and more varieties
(Cortiñas, et al., 2008; Demoulin & Zidda, 2008). This result could be attributed to customer
satisfaction to rewards, customers received higher level of satisfaction on rewards in turn
generated extra values which gradually converted to an acceptance of a high price. Similarly,
inverse relationship between customer satisfaction and price sensitivity was found in the study of
Stock (2005) and Blackwell et al (2006) while positive relationship between price acceptance
level and patronise behaviour was found in Herrmann et al (2001) and Homburg et al (2005).
Moreover, holders who were not satisfied or less satisfied with the rewards were found less price
sensitive compare to non-holders (Cortiñas, et al., 2008; Demoulin & Zidda, 2008). To conclude,
customer loyalty program holders were low price sensitive and they were loyal to store
(Cortiñas, et al., 2008; Demoulin & Zidda, 2008).
Moreover, price sensitivity was different across culture. In the study of examining the
relationship between product quality and patronise decision in apparel retailing, Chinese

preferred products with more functions compare to South Korean (Kim, et al., 2002). Kim et al
(2002) attributed the result to the difference in culture. Chinese were less individualistic compare
to South Korean; therefore, higher extrinsic values (products of a lower price with the same
function or more functions) rasied the chances of positive word-of-mouth in Chinese society that
gradually translated to higher degree of acceptance to buy the product (Schutte & Ciarlante,
1998). As a result, the extrinsic value was more important to attract customer in Chinese society.
Furthermore, in the study of Le Claire (1992) and Tan & McCullough’s (1985), a society like
Hong Kong which shared deeper Chinese beliefs was found more price oriented in making
patronise decision. Although the related results were not conducted for the beauty and health
industry, the similar effect should be observed in the current study.
Additionally, the diversity for the construct of the loyalty program also yielded different effects,
while the outcomes were unpredictable and unexplored. For instance, it could be seen that
accumulation of reward points or stamps might yield the repeated consuming in short burst,
while the membership program might have prolonged but gradual effects to the loyalty of
customers (Shugan, 2005).
1.4 Research Questions
Therefore, with the developed aim and objectives, the research question can be condensed into a
single statement:
What is the mechanism of Customer Loyalty Programs that affect the store loyalty of a brand in
the context of local beauty and health retailing industry?
PRICE IMAGE
Similarly, the illustration to the price image was included in the presentation for the content of
visual merchandising, while the brief history and the development of the concept and
understanding of price image among customers were contained so as to yield the common

ground for the development of the current study along with the linkage to the store loyalty. As a
result, the current section was divided into two subsections, namely, Error: Reference source not
found and Error: Reference source not found, in order to provide the sufficient information and
knowledge for the development of the latter study.
Content of Price Image
In essence, price image was defined as the perceived value of a product and it could be viewed as
casual conviction of costs to deal with specific retailer (Alba, et al., 1994; Gewal &
Marmorstein, 1994; Bell & Lattin, 1998; Buyukkurt, 1986) as while it was affected by
diversified contributors, such as, the quality of the product (Hoch, et al., 1999; Lumpkin &
McConkey, 1984; van Herpen & Pieters, 2002), received customer service in purchasing the
related products (Brown, 2001; King & Ring, 1980; Lumpkin & McConkey, 1984), the brand of
the product (Bowen & Chen, 2001; Gounaris & Stathakopoulos, 2004), the location of
purchasing (Strategic Direction, 2012; Virgona, Helene, 2012), etc. It was not a precise
calculation in terms of dollar, but a scale measurement made by comparison of perceived
expensiveness on offered products and perceived expenditure to a retailer (Alba, et al., 1994;
Gewal & Marmorstein, 1994; Bell & Lattin, 1998; Buyukkurt, 1986; Srivastava & Lurie,
2001;2004). Therefore, a wide range of factors would affect the resultant perception, while the
commonly agreed approach was to measure the dimension from the customers directly
(Marketing Science Institute, 2017). Thus, the function and influence of price image on the
customers in the related factors were illustrated.
In the study conducted by Miranda et al. (2005), the price image was confirmed as one of the
essential elements for the store satisfaction, while the factor would interfere the customers in
selection the store of purchasing and the customer choice of the products. On the other hand, due
to the persistent behaviour of the consumers, the store would provide a response to the related
desire, and it would eventually alter the physical location or decoration of the branches (Cox &
Cox, 1990; Desai & Talukdar, 2003). For instance, if a customer would like to enjoy the low-
priced products, they would like to shop in the branch with simple decoration instead of the
heavily decorated shop (Baltas & Papastathopoulou, 2003). Hence, in suiting the identity of the

store, the operators of the store would change the decoration and physical feature according so as
to fulfill the expectation of the customers. Consequently, in the retailing industry of beauty and
health products, the customers would like to shop in discount stores and department stores rather
than specialty stores (Paulins & Geistfeld, 2003) so as to enjoy the discount and the low price.
Linkage with Store Loyalty
As mentioned above, it could be seen that the price image was an essential component of store
loyalty, while the mediation effect of it had been confirmed from the perceived worthiness,
quality and services (Bolton, 1998; Fornell, et al., 1996; Lemon & Lemon, 1999). Under the
contexts related to retailing industry, the price image also contributed to the returned purchasing
(Fornell, et al., 1996) and the positive image of the shop (Singh & Sirdeshmukh, 2000; Bauer, et
al., 2002; Flavian, et al., 2006), while it was a prerequisite for the cultivation of loyalty.
Imperfect/asymmetric information on price of certain items offered from different retailers
resulted in loyalty behaviour from customers based on casual conviction on price to retailer. As a
result, price image overruled the actual price strategies of different retailers but it was not
applicable to individual who could cheaply and easily attain information on actual price and to
those who had strong desire to seek for the lowest actual price (Gewwal & Marmorstein, 1994;
Bell & Lattin, 1998; Byukkurt, 1986).
Moreover, scholars discovered that customers with less spending power acted loyalty to stores
with perceived low price images; meanwhile, loyalty towards price image would deteriorate
when similar perceived value was found in competitors (Alba, et al., 1994; Burton, et al., 1994;
Singh, et al., 2006). Therefore, it could be supported that the price image was closely related to
the store loyalty, while the mediation effect of it may exist in different parameters.
1.5 Intended Research Methodology
The current study was started with the review of the literature so as to collect to construct
the model in explaining the dynamics of the customer retention program and the store loyalty
(Nguyen, et al., 2017). Then, after the completion of the model, the primary study powered by
the questionnaire-based was conducted so as to verify the model with the help of the statistical

tools (Oliaee, et al., 2016; Resnick, et al., 2016; Strategic Direction, 2012). Therefore, after the
finishing of the related process, it was believed that certain reliability and creditability could be
achieved in drawing the corresponding conclusion from the related analysis of the collected
opinion (Braganza, et al., 2017; Fu, 2016). Finally, with the support of the knowledge gained
from the literature review, the recommendation and precaution related to the starting of the
customer loyalty can be generated. Along with the evidence from the primary research (Tsai, et
al., 2016; Virgona, Helene, 2012), the related suggestion should be practical and constructive for
the owners of the companies in the corresponding field.
1.5.1 LOCATION
Finally, after the illustration to the role of the price image in affecting the store loyalty, the
meaning and the concept of location were explored, while the related contents were included in
the subsequent subsections with the titles of Error: Reference source not found and Error:
Reference source not found so that the related value and the linkage with price image were
explained in detail in the current section.
1.5.2 Value of Location
Location of a branch was an important consideration to the purchasing intention along with the
subsequent loyalty to the store. Nonetheless, the mechanism of the effect to the loyalty from the
geographical difference had not been established clearly, especially for the local situation related
to the beauty and health care products (Strategic Direction, 2012; Virgona, Helene, 2012). The
studies of Christaller (1935) and Losch (1954) provided the observation to the predictable sales
volume related to location, while it was investigated related to the transaction costs of the
customers. For example, the customers would like to shop nearby so as to minimize the traffic
cost and time so that the loyalty could be cultivated in the repeated purchasing. The related
consideration might contribute partially to the impact of the store loyalty, but it could not fully

explain the diversity of sales with the population of the related regions (Christaller, 1935; Losch.
1954).
In the observation of Losch (1954), it could be seen that the areas with the population of
relatively low income would yield lower sales, while some of the customers were willing to
spend in a remote location to them, such as, downtown or cosmopolitan, etc. Therefore, it could
be revealed the absolute location of a branch instead of the relative location of the customers
might have a certain value, while it would contribute to the culmination of loyalty even the place
was not convenience for them (Oliver, 1997). As a result, the mediation effect of price image
was suspected, while it would be investigated in the current study.
1.5.3 Linking with Price Image
Scholars discovered that customers with less spending power acted loyalty to stores with
perceived low price images; meanwhile, loyalty towards price image would deteriorate when
similar perceived value was found in competitors (Alba, et al., 1994; Burton, et al., 1994; Singh,
et al., 2006). In fact, the connection between the price image and the value of location were
spotted by Leong (2013) along with the observation to the mega stores established in the
blooming regions of a city, while the positive price image to the related products or brands were
transferred to the store loyalty ultimately. In addition, the study conducted by Leong (2013) also
statistically and empirically confirm the positive effect to the price image and store satisfaction
from the selection of the particular place of store establishment.
Moreover, Mägi (1995) studied the relationship between travel distance to store and store loyalty
in Sweden and found that sixty percent of customers viewed their favourite store was not located
near their residential area but eighty-six percent of customers repeated patronise in the store near
their home. As a result, location affected behavioural loyalty and calculative commitment but not
attitudinal loyalty to store (Dwyer, et al., 1987; Achrol, 1991; Marshall, 2010).

Furthermore, Bell et al. (1998) examined the relationship between location and different cost
incurred to shop in a location and they discovered that customers were calculative, customers
were willing to travel longer distances to shop in low price image location for the sake of cost
benefit unless no dollar surplus could generate from patronising in low price image location.
Therefore, low price image reduced the awareness of traveling cost. As a result, price image
could have mediating effect between location and attitudinal loyalty to store and calculative
commitment to store (Dwyer, et al., 1987; Achrol, 1991; Marshall, 2010).
Nonetheless, due to the geographical similarity of Hong Kong in different regions, the related
difference among the shops in dissimilar places could not be observed, even though the related
study was dedicated for the local supermarket. The related effect should happen in the study of
beauty and health care products due to the labeling effects. For instance, the locals would
purchase computers and notebooks in Sham Shui Po, while aquatic lovers would like to go to
Goldfish Market, etc. (Hong Kong Tourism Board, 2017). Hence, for the high-end beauty and
health care products, the consumers would like to go the places with relatively high price image.
1.6 Outline of Dissertation
As a result, for the purpose of improved traceability and comprehensiveness to the
approaches and methods adopted in the current research study, the current dissertation was
divided into five chapters, namely, I, L, Error: Reference source not found, Error: Reference
source not found, and Error: Reference source not found so as to yield the enhanced readability
as well as the common ground for the related discussion and development of arguments.

2.0 LITERATURE REVIEW
As a result, for the sake of having a detail illustration to the updated access to the beauty and
health retail industry in Hong Kong and the discussion about the variables involved in the model
building, the current chapter was divided into nine sections, namely, S, C, Error: Reference
source not found, Error: Reference source not found, Error: Reference source not found, Error:
Reference source not found, Error: Reference source not found, Development of Hypotheses,
and Development of Research Model, so as to ensure the readability and the traceability.
2.1 STORE LOYALTY
Store loyalty could be viewed as customer loyalty to store (Bridson, et al., 2008; Leong, 2013)
and customer loyalty could be interpreted as a consistent re-patronize behaviour from a customer
in the same store or to the same brand disregarding competitors marketing to effort to allure
he/she to switch to other brand and location on the one hand and on the others that customer was
willing to recommend the brand and location among friends and colleagues (Oliver, 1999;
McIlroy & Barnett, 2000). Therefore, customer loyalty could be measured by the re-patronize
pattern of the customers and the emotional attachment of customers’ towards the brand (Day,
1969).
The re-patronize pattern was considered as loyal action by Oliver (1999) “…. a deeply held
commitment to re-buy or re-patronize a preferred product/service consistently in the future,
thereby causing repetitive same-brand or same brand-set purchasing….”. Oliver (1999) defined
the development of customer loyalty from the degree of loyalty:
1) Cognitive loyalty was the most surface level of loyalty when the decision was made on the
cost and benefit of the offerings but not the brand of the company; therefore, customers
would switch to other providers when a more cost-effective offering was available (Olive,
1999).
2) Affective loyalty was the second level of loyalty when the customers attained satisfactory
experienced with the company (Olive, 1999). Satisfaction was an emotional factor that was
found harder to be replicated by providers; however, in the study of Reichheld, Markey and

Hopton (2000), a significant proportion of loyal customers swapped to other brand was found
being satisfied with their previous products and services provider; therefore, both cognitive
and affective loyalty could be viewed as vulnerable to competition (Olive, 1999).
3) Conative loyalty was the third level of loyalty (Olive, 1999). Customers intended to plan for
re-patronise from the same company. It could be achieved when frequent positive
experiences translated into a positive attachment towards a company; however, negative
experiences like continuous product failure, would lead to customers’ avoidance to the brand
or defection to other companies (Olive, 1999).
4) Action loyalty was the deepest level of loyalty (Olive, 1999). Customers were satisfied with
previous experiences and positively attached to the company; therefore, customers were
acting more consciously to approach the companies by themselves even with a high
approaching cost (Olive, 1999).
Oliver (1999) elaborated the expression to loyalty as a purchase behaviror. The
attitudinal/emotional attachment could only be translated into repeated purchasing behaviour and
a longer time frame of this behaviour; Oliver (1999) contributed to a clear demonstration of
loyalty development.
In Dick and Basu (1994), customer loyalty to the company was measured by the degree of repeat
patronage and relative attitude. True loyalty to a company was a result of the combination of
high degree re-patronize behaviour and relatively high degree of positive view towards the
company compare to others. Repeat patronage was simply the degree of repeat purchase to the
same store (Dick & Basu, 1994; Oliver, 1999; McIlroy & Barnett, 2000). The relative attitude
was the attitudinal judgement between different companies; a relatively high positive attitude
towards one company over the others could be viewed as an emotional attachment towards that
the most favoured store (Dick & Basu, 1994). Spurious loyalty was found when customers
repurchased frequently not from the favoured store, Latent loyalty was found when repurchased
less frequent from their most favoured store (Dick & Basu, 1994). Please see table (2.1):

Table 2.1: Dick and Basu (1994) loyalty model
The expression of attitude was word-of-mouth behaviour (Dwyer, et al., 1987; Fornell, 1992).
Positive word-of-mouth behaviour was commonly found on loyal customers. Loyal customers
were less price sensitive and more willing to promote the companies by sharing their experiences
within social networks. Moreover, a large proportion of loyal customers re-patronise frequently
(Dwyer, et al., 1987; Fornell, 1992). Khan (2009) described word-of-mouth behaviour as a clear
expression of what the customer felt of the company which should be categorised as attitudinal
loyalty. Meanwhile, behavioural loyalty was an expression of what customers did and therefore,
re-purchase decisions were considered as a measurement of behavioural action (Khan, 2009).
Please see figure (2.1):
Figure 2.1: Loyalty construct (Khan, 2009)
Last but not least, the most advisable situation for a company was a solid long term positive
word-of-mouth behaviour and re-patronise behaviour carried out by the customers, the company

required to build a solid relationship to achieve the combination of solid re-buy pattern and
positive word-of-mouth (Dwyer, et al., 1987; Marshall, 2010). Commitment was the composite
dimension symbolised the relationship of the on-going combination of the behavioural and
attitudinal actions carried out by customers and followers of the store (Dwyer, et al., 1987;
Marshall, 2010). The committed parties preferred a longer-term relationship for the sake to
reduce full costs. Full costs included the cost of swapping to other location, uncertainty on
quality of new products and an anticipated high switching costs in long run (Dwyer, et al., 1987;
Achrol, 1991; Marshall, 2010). Moreover, customer loyalty stimulated consistent re-patronize
behaviour because loyal customers were less vulnerable to negative word-of-mouth to their loyal
brand and store location. Therefore, they were hard to be allured by other alternatives (Ou, et al.,
2011) and as a result, the store loyalty construct of this study would be measured by Behavioural
Action, Word-of-mouth and Commitment (Bridson et al, 2008; Leong, 2013). Please see figure
(2.2):
Figure 2.2: Store loyalty construct of this study (Bridson et al, 2008; Leong, 2013)
From the brief review of the store loyalty in the retail industry, it can be seen that wide range of
contents was involved. Nonetheless, for the purpose of yielding controllable and manageable
scope for the discussion and the development of the related factors, the concept of store loyalty

was limited to the three aspects, namely, Behavioural Action, Word-of-, and Error: Reference
source not found, while they were illustrated in the following subsections with the corresponding
subtitles.
2.1.1 Behavioural Action
First, the behavioural action or behavioural loyalty was defined by the behavioural
conducts of the loyalty customers of a shop. In a normal situation, a loyal customer would like to
maintain a positive interaction with the firm, while they would like to re-patronize consistently in
the same company (Kaur & Soch, 2013). Therefore, some of the researchers, i.e. Bowen & Chen
(2001) utilised a number of re-purchasing behaviour as a measure of the intensity of customer
loyalty to a brand. Therefore, the behavioural loyalty refers to the purchasing behaviour of the
consumer, while particular preference would be dedicated to the favoured brand.
Although the number of returning to the shop yielded the benefits of simplicity, the
criticism for the oversimplification can be observed from the research field. For example, Dick &
Basu (1994) disagreed to treat re-patronization as a sole indicator of customer loyalty due to the
ignorance to the situational constraints of customers. Different reasons can alternate the
continuous decision of purchasing for a customer, such as, the common stock level for certain
product in the retailing location, while the low re-patronization may be contributed by the
different constraints, i.e. the specific usage of certain product, the inadequacy of the product
stock, etc. (Back, 2001; Bass, 1974; Hoyer, 1984; Jacoby & Chestnut, 1978)., instead of lack of
support to the company or the brand loyalty.
Moreover, repeated purchases could be an outcome of high switching costs and
customers’ inertia (Jacoby and Kyner, 1973; Reichheld, 2003). Kuusik (2007) partitioned
behavioral actions by the faithfulness of the customers and conditions. Customers were forced to
be loyal when they patronized certain products or brands unwillingly; it was conditioned to either
product was sold by monopoly, tough exit constraints which forced customers to stay loyal and a
budget constraint that kept customers away from alternatives. (Kuuisk, 2007). Therefore,
customers were forced to be inertia and resulted in loyalty to store.
However, customers were willing to be inertia when they found convenience to re patronize from
the same location and the products valued less important to them (Kuuisk, 2007). Given that the

customers could easily patronize from the same location in the first hand, customers were
unwilling to spend time to seek for alternatives when the value of the product and service were
low (Kuuisk, 2007). This kind of customers’ inertia was in line with the values of cognitive
loyalty: Cognition could be built by earlier or current experiences which was an ongoing
standard behavior like garbage pick-up (Oliver, 1999; Kuuisk, 2007). It was simply an execution
that had no relationship with satisfaction and loyalty (Oliver, 1999).
Lastly, functional loyalty was a subjective loyalty to certain values: like brand, price, quality,
distribution channels, convenience of usage and loyalty program (Wernerfelt, 1991); however,
these values were easily replicable and therefore, the functional effect could be neutralized by
replicas when time went on (Kuuisk, 2007). Therefore, it could be observed that the behavioural
action may be a simple indicator of the loyalty, but a comprehensive indicator should include
diversified components in the measuring scale so as to yield the better characterisation to the
related phenomenon.
2.1.2 Word-of-mouth
Apart from the behavioural action, the attitudinal loyalty referring to the emotional awareness of
the favour or preference of the brand might be another dimension in showing the loyalty to a
brand instead of behavioural conduct, such as, repurchasing, while it could be commonly
observed as word-of-mouth promotion to certain products. The customers would normally
promote and persuade their relatively and friends in using the related products if they found
attitudinal loyal to the products. Therefore, it might be a good indicator of the attitudinal loyalty
(Lumpkin & McConkey, 1984).
Katz & Lazarsfeld (1955) discovered receivers were more easily affected by informal advice
from the personal network rather than traditional formal mass media advertising like Television
advertising, etc. and this personal network could be utilised as a promotion tool to sell consumer
products (Brooks, 1957). Later, this kind of informal advice-message created, received and
delivered from the personal network which used to promote products, consumer, product and

store loyalty were categorised as word-of-mouth effect (Keller, 2007). According to Keller
(2007), the daily word-of-mouth conversations were three and a half billion; meanwhile, brands
were discussed by Americans more than 2 billion times per day; word-of-mouth effect could be
treated as a common phenomenon in a society and word-of-mouth was a common behaviour
among people (Gildin, 2003). The effectiveness of word of mouth could be seen in table (2.2):
Table 2.2: Effectiveness of word-of-mouth (Villanueva et al, 2008)
The flow of word-of-mouth communication was best described by Dwyer (2007; 64); he defined
word-of-mouth communication as “……a network phenomenon: People create ties to other
people with the exchange of units of discourse (that is, messages) that link to create an
information network while the people create a social network.”. When people exchanged
messages, they were creating a social network, the messages could positively or negatively affect
brand or product image of the receivers within this information network and at the same time, the
exchanged messages would be seen as an informal advice on the decision-making process by
receivers that affect the receivers’ purchasing patterns and decisions (Brooks, 1957; Dwyer,
2007; Helm, 2000; Katz & Lazarsfeld, 1955). Positive word-of-mouth could be a result of
satisfactory experiences from store or being affected by positive word-of-mouth form others and
vice versa (Brooks, 1957; Dwyer, 2007; Helm, 2000; Katz & Lazarsfeld, 1955).
Positive word-of-mouth happened when people exchanged positive messages and it was
treasured by companies because positive word-of-mouth was a very effective tool to promote
brand, sales and customer life time value compare to traditional marketing (please see table 2.2).

Conversely, negative word-of-mouth resulted in a spread of negative image and gradually,
encouraged customer disloyal to brand and deteriorating life time value (Cowley, 2014; Donthu
& Carl, 2013; Li, et. al., 2010).
Arndt (1967) discovered that the impact of positive word-of-mouth on patronise decision of a
particular brand was 50% weaker than that of negative word-of-mouth. Other scholars found
similar results in their research (Skowronski & Carlston, 1989; Assael, 2004; Kroloff, 1988;
Fiske, 1980). The results could be attributed to the perceived value of message receivers.
Positive message was commonly found in different communication channels and therefore, it
was perceived as a normal, a more frequent and a lot more casual message to the audiences while
negative messages were found less in public. As a result, negative messages drove more alert to
audiences and lastly, it was perceived as more important to the consideration of choice
(Skowronski & Carlston, 1989; Assael, 2004; Kroloff, 1988; Fiske, 1980).
However, East et. al., (2008) empirically proved that the negative impact created by negative
word-of-mouth was less harmful to loyal customers because loyal customers refused to accept
and resisted negative word-of-mouth on their favour brands. Therefore, the perceived brand
loyalty could be viewed as a pre-posited factor that affected the effectiveness of positive and
negative messages to the receivers. To sum up, word-of-mouth was considered as the behaviour
in promoting the service or product of the company, while the advantage or the preference of the
products may be conveyed to the consumers.
2.1.3 Commitment
Finally, the commitment was the composite dimension symbolised the relationship of the on-
going combination of the behavioural and attitudinal actions carried out by customers and
followers of the store, while it was the most advisable situation for the company or the retailer
(Dwyer, et al., 1987; Marshall, 2010).
The committed parties preferred a longer-term relationship for the sake to reduce full costs
(Marshall, 2010). Full costs included the cost of a swap of location, uncertainties of the quality
of new products and an anticipated high switching costs of repeated purchases (Dwyer, et al.,

1987; Achrol, 1991; Marshall, 2010). Moreover, the committed parties preferred the feeling of
being valued by the company and other committed parties within his/her own interpersonal
networks (Pritchard, et al., 1999; Fullerton, 2003; Bansal, et al., 2004; Marshall, 2010).
Therefore, commitment could be divided into two types, namely, calculative commitment and
affective commitment. The calculative commitment was based on the rational determination of
switching costs and benefits, while the affective commitment was based on the emotional
attachment to committed parties (Dwyer, et al., 1987; Achrol, 1991; Pritchard, et al., 1999;
Fullerton, 2003; Bansal, et al., 2004; Marshall, 2010).
The calculative commitment could be viewed as the willingness to commit long-term
behavioural and attitudinal actions under the considerations of long term nominal net benefits
(Dwyer, et al., 1987; Achrol, 1991; Marshall, 2010). More committed parties could be found in
monopoly and oligopoly markets when no alternatives were found or the costs involved in a
change were too high that they could not offset by the benefits from a swap (Evanschitzky, et al.,
2006; Marshall, 2010). As a result, the market structure was a prepositioned factor in building up
calculative commitment. Therefore, no significant relationship was found between calculative
commitment to both behavioural and attitudinal loyalty in the study of Marshall (2010);
however, in the study of Fullerton (2003), a weaker positive effect of the calculative commitment
on customer retention/ behavioural loyalty was found. To sum up, no evidence showed that the
calculative committed customers were willing to commit to long-term attitudinal actions to store
(Fullerton, 2003; Marshall, 2010).
The affective commitment could be viewed as the willingness to commit long-term behavioural
and attitudinal actions under the consideration of how depth was the relationship between the
company and its’ followers (Dick & Basu, 1994; Marshall, 2010). The most favourable condition
was the followers considered the retailer as a close partner that required frequent promising
responses. Frequent promising responds were frequent re patronise and positive word-of-mouth
behaviour (Dick & Basu, 1994; Evanschitzky, et al., 2006; Marshall, 2010; Garbarino &
Johnson, 1999; Morgan & Hunt, 1994). On the one hand, the affective commitment could be pre-
positioned by the customers when customers’ choice to be loyal on their wishes (Dick & Basu,

1994; Marshall, 2010). On the other hand, the affective commitment could be translated as an
emotional attachment beyond the considerations of facts (Dick & Basu, 1994; Marshall, 2010).
Positive and significant effect of affective commitment to both behavioural and attitudinal
loyalty were found in the study of Marshall (2010); unlike calculative commitment, the value of
emotion benefit helped to build up partnership relations and gradually, strengthened the
intangible status and image of a brand in the view of the customers and at the same time,
attracted more frequent patronise behaviour. Therefore, the tighter the partnership, the more
promising actions like positive word-of-mouth and re-patronise behaviour guaranteed by
customers (Evanschitzky, et al., 2006; Garbarino & Johnson, 1998; Marshall, 2010). As a result,
the affective commitment was emotional based and affected attitudinal loyalty on one hand and
the value of partnership creation could be viewed as “extra” benefit placed on top of tangible
quality that gradually translated in to an “extra” gave up if the affective committed customers
swapped to other shops (Dick & Basu, 1994; Morgan & Hunt, 1994; Garbarino & Johnson,
1998; Evanschitzky, et al., 2006; Marshall, 2010).
To conclude, the commitment was the most advisable situation for the retailer because the
related consumer would not only pay for the product with their pocket but also influence others
in adopting the product (Kaur & Soch, 2013; Gronroos, 1995). In the most extreme situation, the
consumer would commit to the related brand so that they would exclusively adopt the product
from the particular company (Gounaris & Stathakopoulos, 2004; Kaur & Soch, 2013). More
importantly, the users would affect the persons in the social circle in adopting the related
products (Gounaris & Stathakopoulos, 2004; Kaur & Soch, 2013). Therefore, the commitment
concerns about the influence and pressure of others within the social circle, while the friends and
relatives of the consumer might be affected in adopted the service and product eventually.
2.2 CUSTOMER LOYALTY PROGRAMMES
After the completion for the illustration of the outcomes of the current study related to store
loyalty, the function of the programmes and campaigns in enhancing the loyalty would be
discussed so as to provide the updated accessed to the development of the related content. For
the purpose of yielding a clear definition to the customer loyalty programmes, the current section

was divided into four subsection, namely, Error: Reference source not found, Hard Attributes,
Soft Attributes, and Impacts of Customer Loyalty Programmes on Store Loyalty in order to
provide the general classification of the programmes with the support of the development of it.
Additionally, the impact of the programmes on the store loyalty was included so as to provide
the support for the connection between them and the necessity for the investigation of them.
2.2.1 General History
From the 80s, a wide range of investment can be observed from the firms dedicated to the
development of customer loyalty program (Lacey & Sneath, 2006) because an attractive loyalty
program was able to keep customer repeatedly patronise in the same store, that was customer
loyalty to the store or store loyalty (Reichheld & Teal, 1996). However, in the following study,
the related topic had been considered as axillary factors under marketing and consumer
behaviour. Till the study of Leong (2013), the related topic has been considered formally in the
research topic, while he defined customer loyalty program as a marketing tool that often carried
rewards to customers in order to build a better relationship between firm and customer.
In conducting of the related program, the prolong lifetime of loyalty to the firm could result
(Leong, 2013). In the latter development, the program has been escalated to the topic related to
customer retention (Lacey & Sneath, 2006; O’Malley, 1998). Under the related definition, some
of the scholars shared the similar point of views, while they considered customer loyalty
program was a marketing practice tailored to tighten the relationship between companies and
customers by the provision of the rewards in motivating the customers in purchasing so as to
yield the improved revenue in covering the expense devolved in the program (Lacey & Sneath,
2006; O’Malley, 1998). Rather than attracting new customers, the scholars would have the
repeated patronization to the same store so as to yield the reduction to the expense in promotion
(Lacey & Sneath, 2006; Yi & Jeon, 2003; O’Malley, 1998) as well as the marketing efforts
(Narasimham, 1984; Shapiro & Varian, 1998).
In the empirical study conducted by Demoulin & Zidda (2009), the customer retention was
achieved with the launching of the customer loyalty program, while the stimulation to the sales
could be observed. Therefore, the function of the loyalty program in the customer retention was

confirmed though the effects might vary in different industries. In fact, similar observation could
be seen in the studies related to the customer retention by the conducting the customer loyalty
program (Meyer-Waarden, 2004; Demoulin & Zidda, 2008; Dowling & Uncles, 1997; Gronroos,
1995; Sharp & Sharp, 1997; Yi & Jeon, 2003).
More than 90% of population in America, Britain and Canada participated actively in single and
multiple customer loyalty programs (Berman, 2006). Customer loyalty programs prolonged a
one-time decision making process to multiple considerations of the same store by strengthening
competitive values through hard and soft rewards (Hanover Research, 2011; Yi & Jeon, 2003).
The rewards were made effective to strengthened loyalty when the rewards fulfilled the
expectation of the program holders (Hanover Research, 2011; Yi & Jeon, 2003).
The hard rewards were easily and actively replicable as the value of economic benefits could be
objectively ascertained by quality, face value and functions of rewards; therefore, the effect on
customer retention could be neutralised by replica from competitors easily (Hanover Research,
2011; Yi & Jeon, 2003). Conversely, the soft rewards were intangible and less likely to be
ascertained objectively by holders as the value towards communication quality, service
precisions and value of interpersonal relationship varied among different individuals; therefore,
soft rewards were less likely to be replicated entirely. It could be attributed to the variables like
manners and communication skills of employees, precision of given rewards and preference of
holders were less replicable (Bridson, et al., 2008; Leong, 2013; Yi & Jeon, 2003). Moreover,
quality of employees and customer data base were different between companies (Hanover
Research, 2011; Yi & Jeon, 2003).
Soft rewards were useful because providing personal service was a chance to interact and gain
deeper understanding of the holders on the surface level. The deeper level was to gain trust
through frequent satisfactory interaction between companies and holders (Hanover Research,
2011; Yi & Jeon, 2003). However, the soft rewards were often neglected as a vital part of
customer loyalty program. In this study, customer loyalty program construct would be measured
by Hard and Soft rewards (Bridson, et al., 2008; Leong, 2013). Please see figure 2.3:

Figure 2.3: Customer loyalty program constructs (Bridson, et al., 2008; Leong, 2013)
Although complicated and mixed concepts for the hard and soft attributes of the customer loyalty
program, the simplified explanation of the two kinds of attributes could be observed from the
following subsections, namely, Hard Attributes and Soft Attributes, correspondingly (Bridson, et
al., 2008; Leong, 2013). To conclude, rewards to customer could be described or translated into
physical/economic rewards and psychological/emotional rewards; customers receive
physical/economic rewards in terms of discounts, awarded based on purchase volume or value,
gifts which could be calculated in dollars while psychological / emotional rewards were
delivered as special recognition and services (Bridson, et al., 2008; Leong, 2013; Yi & Jeon,
2003).
2.2.2 Hard Attributes
The hard attributes of a customer loyalty program referred to the inclusion of the physical and
substantial reward to the consumer, while it referred to the economic benefits commonly
(Capizzi & Furguson, 2005; Bridson, et al., 2008). Economic rewards were given on patronising
frequency of customers or in the other words, economic rewards were given at specific times of
purchases, the common examples of the related rewards were rebates, prizes, gifts, discount, and
buy one get two, etc (Berman, 2006; Charania, 2011; Hoogenberg, 2010; Zeidler, 2009;
Analysys Mason, 2011). In the case of mobile phone service, loyalty program members were
given free minutes when they recharged the plan for a certain amount or they would receive

bonus internet package or a brand new mobile phone when they upgraded their plan (Furinto, et
al.,2009).
Moreover, tangible rewards were commonly found in the market (Arantola, 2003). Competitors
used to offer similar rebates, prizes, gifts, discount to their loyalty members so as to neutralise
the effect from tangible rewards loyalty programs launched by competitors (Whyte, 2004; Yi &
Jeon, 2003); therefore, scholars stressed on correct mix of hard and soft rewards in a customer
loyalty program (Rosenbaum et al. 2005; Capizzai & Ferguson, 2005; Liu 2007). One of it is
Roehm et al. (2002), and they found that hard reward itself attract the customer, but it could not
stimulate the loyalty of that customer to the brand after the program ended. As a result, tangible
rewards/hard attributes became a discount but failed to create sustainable loyalty to the store
(Roehm, et al., 2002).
Arantola (2013) stressed that concentration on shopping was a presupposition of the
effectiveness of tangible rewards offered by customer loyalty program. Tangible rewards offered
by customer loyalty program became attractive when consumers were highly concentrated on
shopping. Furthermore, Arantola (2003) questioned the perceptions of consumers towards
tangible rewards and found that the perceptions of tangible rewards were different between
consumers, given a similar background or the same age group. Tangible rewards were made
useful when the consumer believed that the rewards offered by the customer loyalty program
were important to them, then they would follow that customer loyalty program. Customers
refused to enter loyalty programs if they did not found the tangible rewards important (Arantola,
2003). As a result, stimulating customer concentration on shopping and picking correct tangible
rewards were two factors that made hard attributes succeed.
In addition, Melancon et al. (2010) investigated the effect of rewards had on customers’
commitment to the rewards suppliers. They discovered that perceived economic rewards lead to
continuous re-purchased behaviour of customers, but the relationship was not intrinsic, once the
rewards suppliers changed, cut-off and reduced the amount of economical rewards, the
customers would swap to others because they were loyal to the rewards but not to the brand, the
store, or the company (Melancon, et al., 2010). Therefore, tangible rewards/hard attributes could

not create emotional binding between customers and store, so tangible rewards/hard attributes
enhanced calculative commitment only, not affective commitment (Marshall, 2010).
2.2.3 Soft Attributes
On the other hand, the soft attributes of a customer loyalty program referred to the special
treatment to the consumer, while it connected to the intangible rewards to the consumers
commonly (Keh & Lee, 2006; Meyer-Waarden & Benavent, 2008; O’Malley & Tynan, 2000;
O’Malley, 1998). Lacey, Suh & Morgan (2007) described intangible rewards as prestige rewards,
the rewards were not valued for money or having practical functions which tangibly benefits the
receivers. Furinto et al. (2009) simply described soft attributes or privileges programs as a
special treatment; members were given special rewards like invitations and access to special
events (Analysys Mason, 2011).
These special rewards/soft attributes were more effective in building longer term binding
relationship with customer loyalty program holders because hard attributes were excessively
offered by different companies in different sectors; instead of rewarding customers on the base of
their purchase amount and discount, companies were suggested to build the feeling of having
relationship with loyalty program holders (Arantola, 2003; Berry, 1995). It could be attributed to
the sense of recognition, which was a social reward (Arantola 2003, 126-127). The social
reward was a recognition of being identical and being remembered by the loyalty program
providers (Arantola, 2003; Berry, 1995). The effectiveness of recognition was remarkable in
high volume and low switching cost industry like supermarket (Bhattachraya & Sen, 2003;
Leong, 2013). Moreover, in the study of Melancon et al. (2010), recognition improved
customers’ commitment to store, unlike economical rewards which the effect on commitment
was uncertain, customers could commit to the company, to the economical rewards or to both.
Normally, Loyalty programs providers held a comprehensive database of the holders’
demographic and patronise data in order to provide the specific messages, communications,
rewards to the target loyalty program holders (Berman, 2006). The common instances for the
related rewards were a qualification of very important people (VIP), special rewards triggered
their emotions, feeling of acknowledgement, feeling of superiority, feeling of exceptional,

feeling of different from other customers, etc (Analysys Mason, 2011; Chandon, Wansink &
Laurent, 2000; Feinberg, Krishna & Zhang, 2002; Furinto, et al., 2009; Kivetz & Simonson,
2002) and among these rewards, generally, loyalty program holders were more satisfaction with
services related to improved services and saving time; differentiate return policies for loyalty
members were also valued by loyalty program holders in retailing industry (Arantola, 2003).
To conclude, soft rewards or soft attributes were said to be intangible; however, it could arouse
similar feelings of having tangible or monetary rewards but less practical and more emotional;
when loyalty holders engage in word-of mouth behaviour on intangible or soft rewards, the
discussion would be more emotional as well because they were expressing their feelings on a
more subjective perspective; discussion of monetary and tangible rewards would be less emotion
in most of the case because tangible rewards were valued more objectively by their price and
intrinsic values (Arantola, 2003).
2.2.4 Impacts of Customer Loyalty Programmes on Store Loyalty
The study conducted by Bloemer & de Ruyter (1998) provided an empirical demonstration of the
connection between customer loyalty program and store loyalty in the configuration of a
department store, while the positive significant effect of the program was recorded, customer
loyalty programmes improved store loyalty. Taylor and Neslin (2005) investigated the twenty-
four months’ patronise data of household in the USA and they discovered positive impacts of
customer loyalty programs to store loyalty in both short and long term respectively. Instant
impact was found when customers raised patronise volume in order to gain points for exchanging
rewards. Gradually, more repeated purchased were found after rewards were given. Seeking for
points to exchange rewards motivated instant purchased and rewards itself attracted commitment
for delay purchased (Blattberg & Neslin, 1990; Rothchild & Gaidis, 1981).
However, Dekimpe & Hanssens (1999) argued that customers were unlikely to commit to re-
patronising after rewards were given to them because customers were unlikely to spend more for
the same reward. Therefore, the rewards earned by points accumulation could be viewed as
discount on regular price. As result, customers ‘commitment to re-buy on regular price was

uncertain. But Cortiñas et al. (2008) found that program holders were less reluctant to regular
price products on one hand and they bought more variety of items and contributed more on sales
to compare to non-program holders. Investigation on share-of-wallet and customer lifetime could
further explain the relation between rewards and store loyalty (Leenheer et al., 2007; Meyer-
Waarden., 2007).
Leenheer et al. (2007) investigated the twenty-four months’ grocery patronise data of nineteen
hundred families in Netherlands and they discovered a weak positive impact of customer loyalty
program on share-of-wallet. Loyalty programs improved the spending proportion of the customer
to the retailer. Meyer-Waarden (2007) found a positive effect of loyalty programs had on share-
of-wallet and consumer lifetime. The study was taken in France. Customers who engaged in a
single loyalty program or holding a single loyalty card of the company were found more loyal
compare to non-program and non-card holder; however, the degree of loyalty deteriorated with
the number of loyalty programs engaged and loyalty cards held by the customers. The more the
programs and cards held by the same holder, the shorter the duration of usage of each program
(Meyer-Waarden, 2007). Therefore, offering similar loyalty cards and programs to competitors’
loyal customers were useful to neutralise their loyalty to competitors (Meyer-Waarden., 2007).
Moreover, given that loyalty program holders were more willing to re-patronise than non-loyalty
program holders, the peak of re-buy behaviour happened in the beginning of participation in a
loyalty programs. Re-buy started to fall in the sixth-ninth mouths of participation (Meyer-
Waarden, 2007).
Also, the study conducted by Leong (2013) showed a similar result with the mediator of
customer satisfaction in the local retailing industry dedicated for a supermarket. Customer
loyalty program improved customer satisfaction to store and gradually, customer satisfaction to
store improved customer loyalty to store (Leong, 2013). Demoulin & Zidda (2008) found that
instead of customer satisfaction to store, customer satisfaction to the rewards offered by
customer loyalty programs was vital to the contribution to store loyalty. In their study of grocery
retailer in Belgium, satisfied program holders were more affected by instant rewards and more
committed to longer term loyalty to the company.

Moreover, all program holders were less reluctant to regular price products offered by the
company and the aggregate sold items and sales volume contributed by program holders were
found more than that of non-program holders (Cortiñas, et al., 2008). An attractive loyalty
program could keep customer repeatedly patronise in the same store, that was customer loyalty
to the store or store loyalty (Reichheld & Teal, 1996). When the program stopped customers
from swapping to other stores, that was differentiation loyalty; consequently, the retailer could
charge a higher price for loyalty customers, and more revenue could be achieved by more cross-
selling and upselling because loyalty customers were not switching to other competitors
(Reichheld & Teal, 1996). To concluded, the conduction of loyalty program yielded two
significant advantages namely, attracting old customers and the reduction of possibility in joint
other program provided the other companies (Meyer-Waarden & Benavent, 2008).
In contrast to the above study, Sharp and Sharp (1997) discovered that there was no difference in
the degree of loyalty between loyalty card holder and non-holder in the study of grocery retailing
in Australia. Moreover, Mägi (2003) discovered a mixed result in Sweden, loyalty program
positively impact loyalty on chain level but not particular store; these results could be attributed
to excess supply of loyalty programs (Leong, 2013). Competition on loyalty programs raised
more channels for customers to gain points to exchange for rewards on one hand and on the other
hand, similar rewards or even homogeneous rewards would be given to customers from different
companies; therefore, the positive effect of the program was neutralised (Mägi, 2003; Meyer-
Waarden., 2007; Leong, 2013).
Furthermore, Dowling and Uncles (1997) argued that keen competition of marketing strategies
between companies forced all companies to replicate the best offered in the market in order to
maintain their positions and gradually, the yielding of program dropped while cost of it remained
the same for all companies (Uncle, 1994). As a result, loyalty program was effective to raise
customer’s spending, to prolong duration of shopping and to attract more revisit to store when
customer held no other program from its’ competitors (Mägi, 2003; Meyer-Waarden., 2007;
Leong, 2013).

However, Wright and Sparks (1999) argued that excess supply of loyalty programs caused no
neutralisation effect on store loyalty because coexistence of attractive programs was commonly
found in the highly competitive market but it resulted in identification problem. Customers failed
to store all loyalty cards in the wallet and gradually, customers forgot those programs when the
cards were not in the wallet (Wright & Sparks, 1999). But Leong (2013) disagreed with it. Leong
(2013) discovered that loyal card was replaced by computer record of customer’s cell phone
numbers, therefore, no card was required reduce the cost to hold a program which became a
merit to attract more customers to join the program. Moreover, demand and competition on
rewards (both physical and non-physical) changed from time to time, either factor changed could
impact on the defection of customers and store loyalty (Leong, 2013). As a result, neutralisation
effect did happen between loyalty program but the degree of effect changed frequently because
the demand and supply for rewards changed from time to time (Leong, 2013).
Furthermore, earlier studies discovered that companies did not pay attention to the arrangement
and design of the loyalty program (Wirtz & Chew, 2002). Therefore, the loyalty program could
not separate itself from another program when competitors offered similar rewards in their
program (Keh & Lee, 2006; Kim, et al., 2013; Meyer-Waarden & Benavent, 2008; O’Malley &
Tynan, 2000; O’Malley, 1998). Sophisticated programs raised difficulties for customers to
understand it and to apply it (Dowling & Uncles, 1997). As a result, customers were reluctant to
join and to use sophisticated programs unless extra efforts could generate excess
fulfilment/enjoyment through experiencing the program (Dowling & Uncles, 1997; Keh & Lee,
2006).
Last but not least, Mauri (2003) found that large proportion of loyalty card holders was not loyal
to the supermarket in Italy and in Benavent and Crie’s (1998, 2000), the growth of loyalty cards
offered did not generate excessive yielding on sales and earnings, more customers’ revisit and a
bigger basket size. Loyalty cards were found useless to motivate customers to revisit the store
(Mägi, 2003; Liebermann, 1999; Passingham, 1998). As a result, loyalty card itself could not
generate store loyalty.

To sum up, regarding on the mixed results found by different scholars, the study posited that the
customer loyalty program influenced store satisfaction directly and linearly because of the
substantial evidence collected from different industry (Blattberg & Neslin, 1990; Rothchild &
Gaidis, 1981; Reichheld & Teal, 1996; Taylor & Neslin, 2005; Demoulin & Zidda, 2008;
Bridson, et al., 2008; Leong, 2013). Hence, the customer loyalty program would affect the store
satisfaction of the consumer, while the proportional association could be observed. It should be
no exception to the industry related to the beauty and health care product retailing (Bloemer & de
Ruyter, 1998; Leong, 2013).
2.3 COMMUNICATIONS WITH CUSTOMERS
Furthermore, the communication with customers was discussed, while the improvement of the
store loyalty resulted from the enhanced communication was assessed and supported in the
current section. For the sake of having a comprehensive analysis of the related dynamics, the
current section started from the illustrative subsection for the content of communication
especially for the communication with customers, while the connection and linkage with store
loyalty were included in the later subsection of the current section. Hence, the section was
divided into twofold, namely, Error: Reference source not found and Error: Reference source not
found, correspondingly.
2.3.1 Illustration of Communication with Customers
Further to the illustration to the price sensitivity, the mediation effect of communication with
customers was investigated, while the related factor should take and importance role in the
persuasion of the customer in engaging the consumption of the product. In essence, the factor
was defined as the message that would like to share with the customers, while the companies
would commonly use advertisement and propagator in convoy the related message (Kuan-Yin, et
al., 2010; Lalos & Cestre, 2009; Carpenter & Fairhurst, 2003) so as to yield the desired results,
such as, improving the brand image, encouraging the consumption, introducing the new products
to the market, etc. (Boulding, et al., 1993). As a result, it was the flow of information or

messages from the company to the customers (Bridson, et al., 2008; Leong, 2013) while van
Staden et al. (2002) expanded it as a process that companies could deliver a message and
customer would gradually respond by feedbacks.
Moreover, van Staden et al. (2002) stated successful communication could result in building up a
better relationship with customers, raising the probability of impulsive buying and reducing
information costs for solutions. In the case of the products related to health care and beauty, the
factor in corresponding to the communication with customers would outweigh importance
particularly as the related medicines and items highly relied on the trustworthiness of the
retailers; therefore, the personal consultancy service promoted by some companies were
welcomed as it encouraged the communication between the store and the customers (Mannings,
2015).
2.3.2 Association with Store Loyalty
From the definition mentioned above, it could be seen that the factor of communication with
customers measured the connection between the store and the clients in the delivery of products
and service. Therefore, it should be with a strong association with the store loyalty (Keh & Lee,
2006; Kim, et al., 2013; Meyer-Waarden & Benavent, 2008; O’Malley & Tynan, 2000;
O’Malley, 1998). Essentially, the improved communication would trigger the good perception
among the clients, while the communication also enabled the users to release the true potential
and efficiency of the purchased products because of the availability of the information and
knowledge obtained from the store (Keh & Lee, 2006; Kim, et al., 2013; Meyer-Waarden &
Benavent, 2008; O’Malley & Tynan, 2000; O’Malley, 1998).
Moreover, Duncan (2002) highlighted communication was part of relationship marketing that
could eventually translate into perceived value of customers that gradually strengthened
commitment to store (Rensburg & Cant, 2003) if the messages were being received by customers
successfully (Rouse & Rouse, 2002). Surface level of a message was the contend like price and
variety of products which could only strengthen calculative commitment (Dwyer, et al, 1987;
Marshall, 2010); while in-deft level message was the implied information like the sense of
superiority and uniqueness by matching receivers with the brand and the products which

gradually, raised affected commitment to store (Dick & Basu, 1994; Marshall, 2010; Rouse &
Rouse, 2002).
To conclude, communication with customers enhanced the user experience and the perceived
quality assurance for the brands from the surface level and raised emotional attachment from the
in-dept level, while they were the stepping stone of the store loyalty. As a result, the
communication with customers was selected as a mediator linking visual merchandising and
store loyalty.
2.4 VISUAL MERCHANDISING
Visual merchandising has been considered as one of the essential elements in contributing the
customer loyalty and the communication with customers (Strategic Direction, 2012; Virgona,
Helene, 2012). Therefore, the related association and the content of the related factor was
illustrated in the current section. Hence, the current section was divided into twofold, namely,
Error: Reference source not found and Error: Reference source not found, respectively.
2.4.1 Content of Visual Merchandising
From the general definition, visual merchandising could be considered an aesthetics of science,
while it laid the foundation for the retail industry (Law, et al., 2012) and it was without exception
to the retailers of health and beauty product (Wu, et al., 2013). The related approach adopted the
hidden techniques to channel the products to the market (Morgan, 2010) so that the number of
employee and the areas for the selling would be reduced along with the maximisation of the
attractiveness of the related products (Strategic Direction, 2012; Virgona, Helene, 2012). In
common application, the related activities related to the development of the unified floor plan
and the window displays so as to attract eye-browsing from window shoppers and customers
(Sebastian, 2008; Rowe, 2014). Visual merchandising displays attempted to grab their attention
and to altered their perceptions to store by the design of floor plan and windows display
(Sebastian, 2008; Rowe, 2014). If they were satisfied, they would be gradually being attracted to
shop in store; therefore, visual merchandising optimised sales at last (Rowe, 2014).

Building attractive windows and sales floor display required excellent presentation skills and
extra efforts to rebalance the window displays and shopping floor which resulted in higher costs
for layouts on one hand and on the other hand, extra spending on skilled visual merchandisers
(Bustos, 2004a). But Dawes (2008) argued that given strong competition from localization,
visual merchandising displays were vital to attracting attentions from customers in similar
location. Moreover, it was an instant message of the first sight of visitors which impact the
positioning of store in customers’ mind directly (Maier, 2009). With the highlighting of the
features and benefits of the goods and service, the visual merchandising was able to attract the
engagement of the consumer along with the motivation for the purchasing behaviour (Ha &
Lennon, 2010). Therefore, it could be seen that the close connection could be expected to the
consumer experience in purchasing (Trigoni, 2016), and it was worthy of the inspection of the
related impact on the customer satisfaction and loyalty to the store (Bashford, 2011; Cervellon &
Coudriet, 2013).
2.4.2 Connection to Communication with Customers
Apart from the strong suspicious in the connection between the visual merchandising and the
store loyalty, the visual merchandising, like other promotion and advertisement in other media,
should have a message to deliver to the customers (Kuan-Yin, et al., 2010; Lalos & Cestre, 2009;
Carpenter & Fairhurst, 2003). Therefore, visual merchandising should have a function in
facilitating the communication with customers so as to yield the improvement to the store loyalty
as well as to enable the returned customers (Garvey, 2010). Garvey (2010) defined the visual
merchandising as an attractive tailored message delivered to receivers in an attempt to guide
receivers’ feel as what the marketers tailored for. Moreover, Storms (2006) discovered that the
role of visual themes and first sight on visual themes had a large impact on patronise decision
and behaviours in the study of shop decoration. Passive visual images travelled through first
sight on the themes approached to receivers and the feeling retained in the memory of receivers
for a longer period of time compare to active messages through verbal communications (Storm,
2006). Therefore, it could be observed that a mediating role of communication with customers
act between visual merchandising and store loyalty.

To conclude, visual merchandising delivered in-deft level message in the first glance of receivers
that possibly altered perception on positioning of store and gradually, raised commitment to store
(Dick & Basu, 1994; Marshall, 2010; Rouse & Rouse, 2002; Storm, 2006). As a result, in the
current study, the exploration of the mediation effect of communication customers between the
visual merchandising and store loyalty was included and conducted so as to construct the model
in explaining the interaction between the customer's loyalty program and store loyalty.
2.5 Development of Hypotheses
Along with the development and the illustration for the building blocks of current study, the
hypotheses to be verified and reviewed in the current work were developed in the current section
in order to support the invention of the research instrument and the related methods of the
analysis. In essence, the connections of the factors could be summarised into three hypotheses
shown in Error: Reference source not found, while the first one was a moderating hypothesis and
the last two of them were mediating hypotheses.
Hypothesis Statement
Hypothesis 1 Customer loyalty program is directly and positive contributing to the store loyalty
in the local beauty and health care retailing industry with moderating effect from
the price sensitivity.
Hypothesis 2 The relationship between visual merchandising and store loyalty is affected by the
mediation of communication with customers.
Hypothesis 3 The relationship between location and store loyalty is affected by the mediation of
price image.
Table 2.1: Summary of Hypotheses Explored in Current Study
Bloemer & de Ruyter (1998) provided an empirical demonstration of the connection between
customer loyalty program and store loyalty in the department store, while the positive significant
effect of the program was recorded, customer loyalty programmes improved store loyalty. Taylor
and Neslin (2005) discovered positive short term and long term impact of customer loyalty
programs to store loyalty; customers were found to raise their patronise volume to gain points for

rewards which was viewed as the instant impact and gradually, more repeated purchased were
found after rewards were given; it could be viewed as seeking for rewards motivated instant
purchased and rewards itself attracted commitment of delay purchased (Blattberg & Neslin,
1990; Rothchild & Gaidis, 1981). Moreover, Cortiñas et al. (2008) and Demoulin & Zidda
(2008) found that program holders were less reluctant to regular price products and they bought
more variety of items and contributed more on total sales to company to non-program holders.
Hence, the customer loyalty program would affect the store satisfaction of the consumer, while
the proportional association could be observed. It should be no exception to the industry related
to the beauty and health care product retailing (Bloemer & de Ruyter, 1998; Leong, 2013).
Therefore, the study posited that the customer loyalty program influenced store loyalty directly
and linearly with moderating effect from price sensitivity because of the substantial evidence
collected from different industries (Blattberg & Neslin, 1990; Rothchild & Gaidis, 1981;
Reichheld & Teal, 1996; Taylor & Neslin, 2005; Demoulin & Zidda, 2008; Bridson, et al., 2008;
Leong, 2013; Cortiñas, et al., 2008; Demoulin & Zidda, 2008) and so H1 is drawn as: Customer
loyalty program is directly and positive contributing to the store loyalty in the local beauty and
health care retailing industry with moderating effect from the price sensitivity.
Visual merchandising, like other promotion and advertisement in other media, should have a
message to deliver to the customers (Kuan-Yin, et al., 2010; Lalos & Cestre, 2009; Carpenter &
Fairhurst, 2003). Therefore, visual merchandising should have a function in facilitating the
communication with customers so as to yield the improvement to the store loyalty as well as to
enable the returned customers (Garvey, 2010). Storms (2006) discovered that the role of visual
themes and first sight on visual themes had a large impact on patronise decision and behaviours.
Passive visual images travelled through the sights and retained in the memory of receivers for a
longer period of time compare to active messages through verbal communications (Storm, 2006);
therefore, it could be observed that a mediating role of communication with customers act
between visual merchandising and store loyalty; visual merchandising delivered in-deft level
message in the first glance of receivers and possibly altered the store positioning and gradually
raised commitment to store (Dick & Basu, 1994; Marshall, 2010; Rouse & Rouse, 2002; Storm,
2006). As a result, in the current study, the exploration of the mediation effect of communication

customers between the visual merchandising and store loyalty was included. Therefore, H2 is
drawn as: The relationship between visual merchandising and store loyalty is affected by the
mediation of communication with customers.
Scholars discovered that customers with less spending power acted loyalty to stores with
perceived low price images; loyalty towards price image would deteriorate when similar
perceived value was found in competitors (Alba, et al., 1994; Burton, et al., 1994; Singh, et al.,
2006). In fact, the connection between the price image and the value of location were spotted by
Leong (2013) along with the observation to the mega stores established in the blooming regions
of a city, while the positive price image to the related products or brands were transferred to the
store loyalty ultimately. In addition, the study conducted by Leong (2013) also statistically and
empirically confirmed the positive effect to the price image and store satisfaction from the
selection of the particular place of store establishment. Bell et al. (1998) examined the
relationship between location and different cost incurred to shop in a location and discovered that
customers were calculative, they were willing to travel longer distances to shop in low price
image location for the sake of cost benefit, unless no dollar surplus could generate from
patronising in low price image location, low price image reduced the awareness of traveling cost;
therefore, price image could have mediating effect between location and attitudinal loyalty to
store and calculative commitment to store (Dwyer, et al., 1987; Achrol, 1991; Marshall, 2010).
Therefore, H3 is drawn as: The relationship between location and store loyalty is affected by the
mediation of price image.
2.6 Development of Research Model
After the illustration to the hypotheses studied in the current study, the summary of them was
included so as to ease the referring. Along with the comparison with the models used in the
previous studies related to the store loyalty in the retail industry, the highlight and contrasting of
the model adopted in the current work can be achieved. In order to specify the contribution and
uniqueness of the model proposed, the current section was developed into two subsections,
namely, Review of the Parental Frameworks and Proposed Model in Current Study, so as to start

the development of framework with the review to the existing and to end with the newly
proposed model in suiting the local context of the beauty and health retailing industry.
2.6.1 Review of the Parental Frameworks
In the original model proposed by Bridson et al. (2008) in explaining the dynamic between the
customer loyalty program and store loyalty, the mediation effect of the customer loyalty program
and store loyalty had been inspected, while it found that the connection between the customer
loyalty program and the store loyalty could be mediated by the store satisfaction. Therefore, the
improved store satisfaction was beneficial to the loyalty to the store, and it provided empirical
support for the devolvement of cultivating the store satisfaction. Essentially, the related model
can be illustrated by the following figure ( Figure 2.1).
Figure 2.1:
Framework Adopted from Bridson et al. (2008)
Moreover, after the development Bridson et al. (2008), the effect of the location has been spotted
by Leong (2013), while the research study pointed out that the store satisfaction would be
affected by the location of the branches. Therefore, the related study confirmed that the effect of
the store satisfaction was localised around the different branch. The related model added the

implication of location in the understanding of the dynamic between customer loyalty program
and store loyalty.
Figure 2.2:
Framework Adopted from Leong (2013)
2.6.2 Proposed Model in Current Study
With reference to the development and illustration of the parental model and the related
hypotheses, the research framework adopted in the current study was visualised in Figure 3.3.
From the depiction, it could be observed that customer loyalty program, visual merchandising,
and location would contribute to the store loyalty. Nonetheless, the relation between customer
loyalty program and store loyalty was subjected to the moderation effect of price sensitivity,
while the associations of visual merchandising and location with store loyalty were found to be
mediated by communication with customer and price image, correspondingly. Therefore, one of
the major objectives of the current study was to establish and to verify the proposed connection
with the data from the primary study.

Figure 3.3: Research Framework Used in Current Study

CHAPTER 3: RESEARCH METHODOLOGY
3.1 Introduction
Chapter 2 has discussed theoretical aspects of impact of customer loyalty and mediating
actors on store loyalty in beauty and health retailing stores. In this chapter researcher has
provided justification for each factor. Scholar has developed research questions and hypotheses
in order to complete this study in effective manner. Chapter 3 would explain the methodology
that have been used in this dissertation. This section will justify the chosen tools and techniques
in order to address research questions (MacKinnon, 2008). In the initial of the chapter there
would be discussion of research methodologies, research design, data collection methods and
data analyses methods. The main purpose of the dissertation is to measure impact of customer
loyalty and mediating actors on store loyalty in beauty and health retailing stores. At the end of
this chapter limitation of the chosen methodology will be discussed in this research. Research
methodology is considered as one of the most important chapter which help in carrying out
investigative in effective manner. Apart from the illustration to the update access to the relation
between the customer loyalty program and the resulted store loyalty, the building blocks of the
current research work was ready, while the development of the research methods in collecting
the desired data was developed so as to guide the conducting of the research activity (Grimm,
1993). Because of the cost consideration and the requirement in collecting a wide range of
opinion from the target group, questionnaire-based survey instead of interview was conducted
along with snowball method in gathering the required number of responses.
For the sake of having a better illustration of the steps and procedures adopted in the
current research study, the chapter was divided into five sections, namely, Research Design,
Sampling & Data Collection, Development of Research Instrument, Statistical Analysis Used,
and Significance & Limitations of Current Work, so as to state the intended approach for the
performance of the study (Dicolo, 2009). There are many tools and techniques that need to be
used by the scholar in order to answer research question and carry out dissertation in right
direction, If individual fails to select appropriate tool then it may fail to meet with the objective.
This chapter will give in-depth detail about various tools and techniques of research methods.
Furthermore, it will justify selected method for the current topic measuring impact of customer
loyalty and mediating actors on store loyalty in beauty and health retailing stores.

3.2 Research methodology
Science can be defined as cumulative acquisition of knowledge, there are many theories
on the topic but by adding new findings previous knowledge can be developed. Research
methodology supports in finding the answers of research question in most accurate manner.
Through using methodologies researcher always tries to conduct study systematically. Gephart,
(1999) argued that paradigms shows scientific research and thoughts. These researches are
composed of classical experiments. In these studies formal theories and trusted models are being
used by scholar. But now-a-days scientistic uses and accepts prevailing paradigm. They try to
apply new knowledge in the existing knowledge in order to develop scope and redefining the
theories. Researcher has some belief about the topic, this helps the scholar in answering to
ontological questions and methodological questions (Cavana, Delahaye and Sekaran, 2001).
These answers show that how scholar are required to practice the inquiry in order to give proper
answers of the research questions. The current study is based on measuring impact of customer
loyalty and mediating factors on store loyalty in beauty and health retailing stores. For this topic
exploratory research is not needed but it was required to test theory in order to find out nature of
reality. Through testing it was essential for the scholar to understand the real impact of consumer
loyalty and mediating factors on female customer and their buying patterns (Gephart, 1999). For
this purpose scholar has taken support of empirical research method positivistic research
philosophy.
There are five main paradigms as per the view of Goodman, (1961) participatory, post-
positivism, criticalism, constructivism, positivism paradigm. Positivist approach is generally
applied in the type of studies where researcher has to research about customers loyalty and
mediating factors. Positivism philosophy is considered as traditional method, it shows that real
events can only observed by the scholar empirically and it can be explained logically. This
method pay more attention on third person knowledge. It concentrates more on objective point of
view. The main agenda of using positivism philosophy is to get observable experiences and
verify the acts positively (Grimm, 1993). In such type of studies scholar major uses positivism
approach but individual involves scientific methods and involve exterior objectives in order to
find out causal dependencies of different factors.
In the positivist approach scholar has to formulate hypotheses and have to test this
hypotheses. Scholar has developed such hypotheses to measure impact of customer loyalty and

mediating factors on store loyalty in beauty and health retailing stores. Scholar has developed
relationship between various aspects in order to answer the research questions. There are two
types of studies qualitative and quantitative (Hair et al, 2006). Qualitative research is much more
subjective in nature. In such type of studies scholar gathers data through observations. Individual
involve respondents into the investigation and ask open-end questions with the participants.
Quantitative research pays more attention on where and what, on other hand qualitative studies
concentrates on why and how. In the qualitative type of investigations researchers involve large
number of participants in the study. Individual prepare questionnaire in order to collect
information about the topic (MacKinnon, 2008).
In the current dissertation researcher has conducted study in quantitative manner. The
main reason of carrying out investigation in quantitative manner is that it is more effective in
exploring and testifying relationship between various variables. The chosen methodology helps
the researcher in conducting dissertation in effective manner.
3.3 Research design
Research design is considered as set of process that are used by investigator in collecting
and analysing detail about the research problems. It defines outline of the study so that individual
can get to know the way of carrying out research. The research study was started from the study
to the existing and available journals in order to gather the required factors and model in
characterising the interaction between the customer loyalty program and store loyalty. After the
review of different models and the related theory, the model developed by Leong (2013) have
been selected due to the simplicity (Gephart, 1999; Leong, 2013; Lincoln & Guba, 2000), while
the related research instrument has been referenced in the defining of the questionnaire used in
the current study. The current study was designed as cross-sectional research so as to yield the
impact of the responses from different groups of participants (Hunt, 2002). Therefore, the related
survey was conducted in a cyber environment in order to enlarge the exposure.
From a practical point of view, the respondents were invited to give their responses in
relation to the purchasing behaviour of the beauty related items. In particular, the demographic
information and their perceived importance of the components in a customer loyalty program
were accessed with the defined questions. Multiple choice questions were adopted in the
collection of data related to the personal information of the participants, while they were invited
to state their level of acceptance to the corresponding statements in corresponding to the

importance of different components of the loyalty program, while seven-point Likert scale
(Likert, 1932; Likert, 1961; Wuensch, 2009) was employed in facilitating the expression of the
opinion. Furthermore, store satisfaction, location, visual merchandising, store loyalty, and price
sensitivity were accessed with similar configuration, but the respondents were invited to answer
the related questions with reference to the most favour or the most frequently purchased retailer.
After the completion of the data collected, the data analysis was conducted, while analysis of
variance (ANOVA) with respect to different demographic groups (Gonzalez - Rodriguez, et al.,
2012; Tantarpale & Gracy, 2012), regressive analysis (Cohen, et al., 2003; Weaver & Dubois,
2012), and correlative analysis (Kemp, et al., 1995; Brown, 2001; Cohen, et al., 2003; Székely, et
al., 2007; Ratner, 2013) were conducted so as to contrast the diversity of the different
demographic group and to verify the causal relationship along with the moderation effect.
3.3.1 Type of research design
There are many types of research designs that are applied in different types of
investigations such as exploratory, causal, descriptive. Exploratory is the type of research design
which concentrates more on-going ideas and find out insights about topic in order to get more
information about research problem. It is beneficial tool and helps in gaining familiarity with the
research problems. Such type of studies are flexible in nature and individual can explore ideas
easily (Hair et al, 2006).
Causal research is another pays more attention on evidences, it finds out cause and effect
relationship between various variables. Descriptive research design is another type of technique,
it is generally applied in such type of investigations where individual has to determine frequency
and have to develop relationship between two variables. It assists in providing more accurate
description about the current situation which helps in answering research questions. It examines
variables and supports the scholar in completing dissertation in effective manner (Gephart,
1999).
The main aim of this dissertation is to measure impact of customer loyalty and mediating
factors on store loyalty in beauty and health retailing stores. For accomplishing this purpose
scholar has taken support of descriptive research design which is more appropriate in the current
investigation. This has helped in finding answers related to factors that impact on consumer
loyalty in beauty stores.

3.3.2 Research methods
As per the view of Grimm, (1993) Testing of hypotheses, structured observations, survey
conforms in logical manner helps in conducting quantitative studies. Experimental reseach tool is
the type of technique which is applies in order to understand cause and effect relationship
between two variables. It is responsibility of researcher that to control the objects and assign
objects to the participants as per the requirement of investigation. During analysis scholar has to
compare scores and accordingly it gets treatment to measure the variables. Experimental tool can
not be applied in the type of studies where individual has to conduct a study on consumers'
loyalty and factors that influence them because of their complexity. That is the reason that
scholar has not applied experimental technique in the current investigation (Dicolo, 2009).
Survey research method is another type of technique which is suitable in the place when
scholar has to gather information from subset of population. It is considered as one of the best
technique where individual has to gather information from primary sources. Through survey
researcher can gather large amount of information from mass population. In order to test
hypotheses use of survey method is most appropriate (Cavana, Delahaye and Sekaran, 2001).
3.3.3 Survey research
Survey research can be considered as most quick, inexpensive method for collecting
detail about the subject matter. In the current study scholar has selected questionnaire based
survey. There are many types of survey such as interview and telephonic survey. Interviewer
administrated questionnaire is generally applies in the place where scholar has to answer the
complex topics because through interview researcher can give answers of research questions.
Response rate of such type of survey is high which helps in getting in-depth detail about subject
matter. Scholar has applied this technique and has involved large samples for testing hypotheses
(Hair et al, 2006).
Self administrated questionnaire is another technique in which respondents are required
to give answers of questions. Researcher sent questionnaire to them through email, fax etc. The
main advantage of this method is that cost of this source is quite low and short lead time as well.
In the current dissertation impact of customer loyalty and mediating factors on store loyalty in

beauty and health retailing stores scholar has chosen web hosted survey technique in order to get
information about customer loyalty and factors that influence them (MacKinnon, 2008).
3.3.4 Sampling
Sample is selected by the researcher from the population. Sampling is the technique in
which individual select adequate number of people with right element those who can give
accurate answers about the subject matter. In the sampling process scholar has to follow several
steps: defining population, determine sample frame, sample design determine, select appropriate
sample size and execute sample process (Grimm, 1993).
In the first phase researcher has selected the population. Individual has involved people
those who use cosmetic products and go to beauty shops frequently. In the second step scholar
has to determine sample frame. There are two main types of sampling techniques : probability
and non probability technique. In the probability tool random, systematic, stratified an cluster
sampling tools are included. On other hand in non probability technique convenience sampling,
judgement sampling, quota sampling etc. are included (Cavana, Delahaye and Sekaran, 2001).
Convenience sampling is the method in which researcher collect data from the samples
those who are available conveniently and they can give answers of the questions. Sample size
between 30-500 is considered as most appropriate sample size. Grimm, (1993) argued that
sample size selection need to be done properly, selection of sample size depends upon ratio of
independent variables. In the current study on impact of customer loyalty and mediating factors
on store loyalty in beauty and health retailing stores researcher has selected 200 sample size.
Self-administrated online questionnaires were developed in collecting the responses due to the
suitability and the cost effectiveness, while the online questionnaire was available between
7/9/2017 and 14/11/2017 inclusively powered by Qualtrics. Invitations were sent to potential
participants via internet social networks (Facebook and Whatsapp) through facebook messenger
and whatsapp (Neuman, 1997; Rundle-Thiele, 2005). The survey was anonymous and the
answers would not be clued to identify the participants. All information was exported from
Qualtrics and stored within the computers of the supervisor and the research student for scientific
analysis. All information from Qualtrics and the computer was removed at the completion of
analysis and one single copy is securely stored on the University of Newcastle’s ownCloud
secure server by the University of Newcastle for 5 years.

Potential participants were presented a copy of the information statement which was
attached on the survey explaining the scope of the study and the rights of the participants. The
potential participants were asked if they were willing to participate voluntarily in this research by
completing an online questionnaire. The completed questionnaires would be considered as
implied consent from participants. Participants were required to complete an online
questionnaire. The questionnaire was available in Traditional Chinese and English. It would take
approximately 10 minutes to complete (Dicolo, 2009). Participation was voluntary and
participants could exit the questionnaire at any time prior to submission.
Participants were Hong Kong residents over the age of 18 who had experience in
purchasing beauty and health care products in Hong Kong and capable to read either Chinese or
English. Once the participants accomplished the online questionnaire, the participants were given
a chance to invite their friends to participate in the same questionnaire based interview so as to
achieve the expected number of the responses of 200 in suiting the population of 7.2 million in
Hong Kong (Hong Kong Census and Statistic Department, 2014). In essence, snowball sampling
(Morgan, 2008, p. 816 – 817; Goodman, 1961) was adopted in the conduction of current study.
3.3.5 Questionnaire
The questionnaire consists of two sections: In the first part respondent give answers about
their buying pattern and in the second section participants will discuss about impact of consumer
loyalty on beauty shops. This questionnaire will take maximum 15 minute and after that
individual will be able to give information about research questions.
3.3.6 Product Categories
Product categories are included in the questionnaire, that can help the scholar in
examining their behaviour. Health care products involve in this study are such as AEON, Angel,
Aster, Bonjour, City Super, Colormix, Joyce Beauty, Parkn shop, Yata etc.
3.3.7 Research Framework
Need recognition, searching of information, evaluating alternatives, purchase decision,
post purchase behaviour are five stages of buying decision process in order to find out their
loyalty. In the current study scholar has concentrated on four phase and post purchase behaviour
has been eliminated (MacKinnon, 2008).

3.4 Data Collection
Four pre-conditions questions were asked in the beginning to identify if the participants
were Hong Kong residents over the age of 18 who had experience in purchasing beauty and
health care products in Hong Kong. With reference to the research instrument developed by
Leong (2013) and Bridson, et al. (2008) as well as the customization in suiting the purpose of the
current study, the research instrument was defined, while there were total 53 questions in easing
the collection of responses from the participants. The first eleven questions were dedicated in
clarifying the demographic background of the respondents, i.e. gender, age, marital status,
monthly income, received education along with the favourite store, the frequency of visiting the
store (in-person and online) and the participation to the loyalty program and membership, while
the questions along with the related options were provided so that the participants can opt the
most proper answers out of the options. Then, starting from the question twelve, the questions in
measuring the related research constructs were included, while all of them were encapsulated
into positively coded statements. Thus, the participants can express their level of agreeing to the
statements with 7-point Likert scale (Likert, 1932; Likert, 1961; Wuensch, 2009) with the related
options of “Strongly Disagree”, “Disagree”, “Slightly Disagree”, “Neural”, “Slightly Agree”,
“Agree”, and “Strongly Agree”. Furthermore, the related arrangement also facilitated the
analysis of the related results, as the related opinion can be quantized by the assignment of 1 to 7,
respectively.
In the first part of accessing the factors involved in the current study, the questions
related to store loyalty were asked, while behavioural action, word of mouth, and commitment
were considered as the components of it, and 16 statements were assigned in accessing their
point of view related to store loyalty of them. Then, in the next section, the questions of customer
loyalty program containing the hard and soft attributes were included, while 14 statements were
dedicated to accessing the related item. Finally, price sensitivity, communication with the
customer, visual merchandising, price image, and location were contained, while three questions
each were assigned to price sensitivity and location and two questions each were allocated to
communication with the customer, visual merchandising and price image (Grimm, 1993). The
detailed mapping between the measures of each construct and question could be seen from Table
3.2, while it summarised the corresponding for the questions and the intended measures.

Item / Construct Measures Question No.
11 Demographic
Information
1. Gender
2. Age Group
3. Marital Status
4. Monthly Income
5. Received Education
6. Favourite Retailer
7. Frequency of Visiting
(in-person and online)
8. Participation in Loyalty
Program and
membership
Question 1
Question 2
Question 3
Question 4
Question 5
Question 6
Question 7-9
Question 10-1111 Store Loyalty 9. Behavioural Action
10. Word of Mouth
11. Commitment
Question 12 –
Question 16
Question 17 –
Question 21
Question 22 –
Question 2711 Customer Loyalty
Program
12. Hard Attributes
13. Soft Attributes
Question 28 –
Question 32
Question 33 –
Question 4111 Price Sensitivity 14. Price Sensitivity Question 42 –
Question 4411 Communication with
Customer
15. Communication with
Customer
Question 45 –
Question 4611 Visual Merchandising 16. Visual Merchandising Question 47 –
Question 4811 Price Image 17. Price Image Question 49 –
Question 5011 Location 18. Location Question 51 –

Question 53
Table 3.2: Mapping of Research Constructs & Questions
Accordingly, the current section would be divided into eight subsections, namely, Demographic
Information, Store Loyalty, Customer Loyalty Program, Price Sensitivity, Communication with
Customer, Visual Merchandisin, Price Image, Location, respectively, in order to give the
justification and evidence for the development of the research instrument (Grimm, 1993).
3.4.1 Demographic Information
First of all, prior to the accessing to the opinion related to the customer loyalty program
and the satisfaction and loyalty of the customers along with the additional factors, the
demographic information were collected so as to support the investigation to the segmentation of
responses in regarding to the demographic classification (Loker-Murphy, 1996; Brown, 2001;
Thyne, et al., 2004). Therefore, the related seven pieces of information, namely, gender, age,
marital status, monthly income, received education, the frequency of visiting the favour store,
and participation in loyalty program was accessed with the corresponding questions shown in
Table 3.3.
Measures Options
1. Are you a male or a
female?
a. Male
b. Female
c. Other
2. How old are you? a. Less than 30
b. 31 to 40
c. 41 to 50
d. 51 to 60
e. Over 60
3. What is your Marital
Status?
a. Single
b. Married
c. Other
4. What is your current a. Below HKD$15,000

Monthly Income?
(individual)
b. HKD$15,001 to HKD$25,000
c. HKD$25,001 to HKD$35,000
d. HKD$35,001 to HKD$45,000
e. Above HKD$45,000
5. What is your Highest
Education
Qualification?
a. Completion of Primary Education or Below
b. Completion of Secondary Education
c. Completion of Diploma/ Higher Diploma/
Associate Degree
d. Completion of Bachelor Degree
e. Completion of Master Degree
f. Completion of Doctoral Degree
6. Which one is your
Favourite beauty and
health care products
retailer?
a. AEON
b. Angel
c. Aster
d. Bonjour
e. City Super/Logon
f. Colormix
g. Joyce Beauty
h. Jurlique
i. Lane Crawford
j. Manning’s
k. Nest Beauty
l. ParknShop
m. Sa Sa
n. Sogo
o. UNY/APITA/PIAGO
p. Watsons
q. Wellcome
r. Wing On
s. Yata
t. other

7. How frequently do you
visit your Favourite
Store?
a. Almost Daily
b. At least once a Week
c. At least once a Month
d. At least once a Year
e. Almost Never
8. How frequently do you
shop at your Favourite
Store (in-person)?
a. Almost Daily
b. At least once a Week
c. At least once a Month
d. At least once a Year
e. Almost Never
9. How frequently do you
shop at your Favourite
Store (online)?
a. Almost Daily
b. At least once a Week
c. At least once a Month
d. At least once a Year
e. Almost Never
10. Do you participate in
any kind of beauty and
health care products
retailer’s loyalty
program? (point
accumulation is loyalty
program, example
Octopus Card in Hong
Kong)
a. Yes
b. No
11. Are you a member of
beauty and health care
products retailer’s
loyalty program?
(example holding an
Octopus Card in Hong
Kong)
a. Yes
b. No

Table 3.3: Questions Adopted in Accessing the Demographic Information of the Respondents
3.4.2 Store Loyalty
Apart from the questions related to the demographic information, the measurement of
store loyalty will be designed on a 7-point semantic differential scale between number 1 strongly
disagree to point 7 strongly agree (Leong, 2013). In essence, 16 statements have been defined in
accessing the related information from the respondents, while the five, five and six statements
were composed to access the behavioural aspect, word of mouth, and commitment, respectively.
Measures Statements Adopted Reference
Behavioural 12. I would buy the beauty and health care
related product from the retailer even if
another retailer has a sale.
13. I would shop at the favoured retailer
regardless the offers provided by the
competitors.
14. I would buy from the retailer even if they are
hard to reach.
15. If the particular branch of the retailer is
closed, it is difficult to find the substitution.
16. I have never considered switching to another
retailer.
(Foster &
Cadogan,
2000; Quester
& Lim, 2003)
Word of
Mouth
17. I would tell the persons in my social network
about the positive experience of shopping in
the retailer.
18. I would convince the persons in my social
network to change their retailer because of
my positive experience from my favour
retailer.
19. I would say positive side about the retailer to
others.
(Gounaris &
Stathakopoulos
, 2004; Kaur &
Soch, 2013)

20. I will make a recommendation about the
retailer if a person is seeking for my advice.
21. I would encourage others to purchase in the
retailer.
Commitment 22. I would consider myself as a regular customer
of the retailer.
23. I am loyal to the retailer.
24. I would consider the retailer as the first
choice in the selection of the beauty products.
25. I would like to purchase more in the future.
26. I would consistently and continuously
purchase beauty and health care related
products from the retailer.
27. I make most of the purchases in the retailer.
(de Wulf &
Odekerken-
Schroder,
2003;
Odekerken-
Schroder, et al.,
2003; Morgan
& Hunt, 1994;
Foster &
Cadogan,
2000; White &
Schneider,
200)
Table 3.4: Statements Adopted in Accessing the Measure of Store Loyalty
3.4.3 Customer Loyalty Program
The measurement of importance for hard and soft rewards will be designed on a Likert
scale ranging from number 1 not at all important to number 7 critical. There are 14 scale
questions in this part (Leong, 2013), while five and nine of them are hard attributes and soft
attributes, correspondingly.
Measure
s
Statements Adopted Reference
Hard
Attribut
es
28. I think the discount provided is necessary for a
customer loyalty program.
29. I think the free item in accompanying to the
purchasing is important for a customer loyalty
(de Wulf &
Odekerken-
Schroder,
2003)

program.
30. I think the receiving of the free coupon is necessary
for a customer loyalty program.
31. I think the provision of the gift voucher is important
for a customer loyalty program.
32. I think the enjoyment of point collection and
redemption is important for a customer loyalty
program.
Soft
Attribut
es
33. I think the better service offered by the stores to the
program members is important for a customer loyalty
program.
34. I think paying more effort to the program member
rather than non-regular consumers is important for a
customer loyalty program.
35. I think the personal communication between the
program members and the store is important for a
customer loyalty program.
36. I think the personal welfare of the program members
is important for a customer loyalty program.
37. I think being recognised by the business is important
for a customer loyalty program.
38. I think cultivation of the sense of belonging is
important for a customer loyalty program.
39. I think trust among the program members and the
store is important for a customer loyalty program.
40. I think being considered as unique by the business is
important for a customer loyalty program.
41. I think the closeness between the program members
and the retailer is important for a customer loyalty
program.
(de Wulf &
Odekerken-
Schroder,
2003)
Table 3.5: Statements Adopted in Accessing the Measures of Customer Loyalty Program

3.4.4 Price Sensitivity
Then, the moderator between the customer loyalty program and store loyalty, namely,
price sensitivity was accessed with the defined three statements shown in Table 3.6, while the
respondents were invited to give the responses based on their acceptance to the statements
related to their point of view in purchasing a product (Dicolo, 2009).
Measure Statements Adopted Reference
Price
Sensitivity
42. I would shop based on the price of the
product.
43. I would shop for the special offers.
44. I can accept lower quality if the price
is low.
(Yi & Jeon, 2003;
Narasimham, 1984;
Shapiro & Varian, 1998)
Table 3.6: Statements Adopted in Accessing the Measure of Price Sensitivity
3.4.5 Communication with Customer
Additionally, communication with the customer was one of the essential mediators for
the research framework, while it commonly in the forms of catalogues and advertisements
(McGoldrick & Ho, 1992; Walters & Knee, 1989). Therefore, the perceived information
provided by the shop and the utilisation of the loyalty program (Leong, 2013) were accessed with
the following two questions summarised in Table 3.7. In the current work, the communication
with the customer was assumed to be with mediation effect between visual merchandising and
store loyalty.
Communicatio
n with
Customer
45. The advertisement of the retailer for
providing information of the provision
of offers
46. The communication channels
established by the store in facilitating
information flow
(Bloemer &
Odekerken-
Schröder, 2002;
McGoldrick &
Ho, 1992)
Table 3.7: Statements Adopted in Accessing the Communication with Customer

3.4.6 Visual Merchandisin
In the same sense, the self-deviated parameter in influencing the store satisfaction was
accessed with the corresponding statement along with the 7-point Likert scale, while two
statements have been dedicated to facilitating the respondents in giving their opinion to the
related issues. The related statements and the references to the statements can be observed from
the following table (Table 3.8).
Measure Statements Adopted Reference
Visual
Merchandising
47. The store layouts of the retailer
are properly designed.
48. The design of the display of the
store is aligning to the theme
properly.
(Law, et al., 2012; Wu, et
al., 2013; Strategic
Direction, 2012; Virgona,
Helene, 2012)
Table 3.8: Statements Adopted in Accessing the Measure of Visual Merchandising
3.4.7 Price Image
As one of the most important dimensions in evaluating customer satisfaction suggested
by Bridson et al. (2008), price image referred to the perceived pricing of the customers, while it
was considered as a mediator in bridging the location and store loyalty. Additionally, it was
subdivided into the sub-dimension of the suitability of the strategy and the frequent of
promotion. As a result, the related sub-factors were accessed by the corresponding two
statements shown in Table 3.9.
Price
Image
49. The pricing strategy of the retailer
50. The frequency of promotional offers
given by the stores
(Miranda, et al., 2005; Cox &
Cox, 1990; Desai & Talukdar,
2003; Baltas &
Papastathopoulou, 2003;
Paulins & Geistfeld, 2003)
Table 3.9: Statements Adopted in Accessing the Price Image

3.4.8 Location
Finally, the independent variable of location was accessed with the corresponding three
statements along with the scale dedicated for the level of agreeing to them. The related
statements adopted in the current study have been summarised in the following table (Table
3.10).
Measures Statements Adopted Reference
Location 51. I find the location of the branches is well
planned.
52. I find convenient to do shopping in the
nearby stores of my favourite brand.
53. I find the retailers pick good locations to
establish the branches.
(Leong, 2013;
Christaller,
1935; Losch,
1954)
Table 3.10: Statements Adopted in Accessing the Location
3.5 Measures
Data will be analysed quantitatively. Both moderation and mediation analysis will be
performed using a program such the PROCESS macro for SPSS. Three separate models will be
estimated to test the indirect effect of mediators on the dependent variable (via multiple
mediators).
After the collection of data with the application of the research instrument, the statistical
analysis was conducted so as to reveal the meaning behind the data. For the sake of ensuring the
reliability and the correctness of the computation, Statistical Product and Service Solutions
(SPSS) software version 22 (Pearson, 2007; Levesque, 2007; Dicolo, 2009; Bray, 2012; Weaver
& Dubois, 2012; Pallant, 2013). The results from the online platform were transformed into an
Excel file so as to import to the statistical package in avoiding the human errors during data
entry.
In the descriptive analysis of the data, frequency table and cross tabulation along with
different forms of visualisation were applied so as to yield the visual implication for the collected
data, while number of sample, mean, median and mode for the related answers were employed in
generating the summative preview to the characteristics of the collected responses. Additionally,

Cronbach’s alpha test was applied in defining the reliability of the obtained data, while the
threshold value was defined as 0.7 as the convention of a research study (Cronbach, 1951). From
a practical point of view, Cronbach’s alpha was a measure for the inter-item correlations, while
certain correction should be found among the items in a normal situation. If the value was not, no
correlation can be observed, while the responses were relatively random, while consistent results
would be expected in general cases. In the cases that the score of low, certain questions would be
removed so as to ensure the reliability. Apart from the parametric data, the reliability of
parametric data, i.e., the demographic data, was ensured by the chi-square test against the
random data and the expected values (Grimm, 1993; Leong, 2013).
Finally, the regressive relationship between loyalty program and store satisfaction were
verified with the adoption of regression analysis along with the associated techniques. The
related hypotheses and the condition for the verification have been included in Section 2.8
Development of Hypotheses. In essence, the regression test was used in verifying the association
among the factors, while 95% confident level were adopted in the related analysis (Cavana, et
al., 2001; Grimm, 1993; Leong, 2013).
3.7 Validity
Validity, reliability are two main aspects of dissertation. It is necessary to use in the study
in order to increase accuracy of investigation. Reliability and can defined as consistency of
measuring instruments. On other hand validity can be described as truthfulness of findings.
Grimm, (1993) stated that researcher has to ensure that measurement instruments actually
measures the things as per the objective of study. Reliability mainly pay attention on
standardizing data collection instruments so that overall result can be matched with the real
findings. If there is high reliability then consistency remain maintain if the same study conducted
again. Reliability is less in quantitative studies as compare to qualitative investigations.
In the current dissertation researcher has applied quantitative research and scholar has
paid attention on validity of data so that future complications can be minimized. It is the
indicator that shows the truthiness of findings. There are many perspectives through which
individual can measure validity. Internal and external are two main perspective to access the
validity. Both these aspects are much more effective and useful in order to get and measure valid
results. Internal validity can be described as method through which researcher gives evidence of
cause-effect relationship between various variables (Dicolo, 2009). In the current investigation

scholar has applied survey research method and this methodology is unable to determine cause
effect relationship. Thus, by using internal aspect individual can not measure validity. On other
hand external validity can be explained as effectiveness of findings to target population. But
researcher has to face two major threats when applying external validity measurement
instruments: persons and environment. It is essential to ensure that findings can be generalized to
right population. For that scholar takes support of primary data or real current information
instead of using secondary data (Grimm, 1993).
For that scholar has distributed questionnaire among all customers
3.8 Ethical considerations
Ethical consideration is considered as most important part of the study, researcher has to
consider this element while gathering personal data from people. In the current survey scholar
has reviewed ethics and it was approved from human research ethics committee of Newcastle
University. Participants those who were involved in the investigations were not got any monitory
benefit from the researcher. Scholar has maintained confidentiality in the investigation and has
not leaked any detail about the topic with third person. Investigator has destroyed the hard copy
of questionnaire after completion of this project. It has stored the data in password protected
computer and soft copy has bee destroyed by the person after getting approval of this dissertation
(Hair et al, 2006).
3.9 Significance and Limitation of research design
Last but not least, the current study would provide an updated access to the local retailing
market related to beauty and healthcare product, while the suggestion on the involvement of the
customer loyalty program and the resulted effectiveness could be revealed so as to yield a
practical precaution for the practitioners in the related industry (Cavana, Delahaye and Sekaran,
2001).
Although the necessary measures in preventing the failure of the conclusion and the
conduction of the current work, certain limitations of the current study were unavoidable. First,
the current study was designed as a cross-sectional base, but the causal relation between the
program and the store loyalty. Second, the direct and positivism were assumed, so the separated
effects from the hard and soft attributes cannot be resolved. Third, there was a miss on the
analysis to the profitability improvement brought by the program, while the recommendation
may not be sufficient enough for the decision making (Grimm, 1993). Finally, the holistic

overview of the dynamics between the factors may not be covered, while the hidden factors may
alternate the casual relation.
3.10 Conclusion
The ultimate goal of the scholar was to provide detail about impact of consumer loyalty
program and mediating factors on store loyalty. Scholar has applied suitable tools and techniques
through which individual has become able to get valid and reliable results. Regressive,
Cronbach's alpha test, cross tabulation, frequency etc. have supported in finding results about the
subject matter.

CHAPTER 4: DATA ANALYSIS
4.1 Introduction
Data analyses is considered as one of the most important chapter in the dissertation. It
supports the scholar in analysing information and getting valid results. In this section, scholar
will take support of SPSS in order to analysis information effectively. Individual will apply
descriptive analyses, cross tabulation test, Cronbach's alpha test, frequency etc. in order to get
accurate results about Impact of Customer Loyalty Programs & Mediating Factors on Store
Loyalty.
4.2 Descriptive analyses

Descriptive
Statistics
N Minimum Maximum Mean Std. Deviation Variance
buyingproductsfromretailereven
anotherretailerhassale 200 1.00 7.00 3.6450 1.47984 2.190
difficulttobuysubstituteproduct 200 1.00 7.00 4.8100 1.25770 1.582
sharepositiveexperiencewithoth
ers 200 1.00 7.00 4.6450 1.87793 3.527
imakemostpurcahseinretailers 200 1.00 7.00 4.5200 1.52355 2.321
recognisedbybusinessisimporta
ntforloyalty 200 1.00 7.00 4.5200 1.52355 2.321
personalwelfareisimportant 200 1.00 7.00 4.5200 1.52355 2.321
personalcommunicationbetwee
nmprogrmmembersandstoreimp
ortant
200 1.00 7.00 4.5200 1.52355 2.321
payingmoreeffortstoprogrmme
mberisimportamttoloyaltyofcos
numer
200 1.00 7.00 5.2050 1.55727 2.425
enjoymentofpointcollectionandr
edemptonisimportamt 200 1.00 7.00 4.3200 1.19362 1.425
betterservicesisimportmtnforloy
alty 200 1.00 7.00 6.1750 1.69076 2.859
consistentlyandcontinouslypurc
ahsebeautyproductsfromretailer 200 1.00 7.00 4.6950 1.85179 3.429
discountisneccessyforcustomerl
oyaltyprogram 200 1.00 7.00 6.3050 1.40064 1.962
advertisementosretailerforprovi
dinginformationofprovisionofof
ers
200 1.00 7.00 4.5200 1.52355 2.321
communicationchannleestablish
edbystoreisfacilating 200 1.00 7.00 4.5200 1.52355 2.321
storelayoutofretailerareproperly
designed 200 1.00 7.00 4.5200 1.52355 2.321
Valid N (listwise) 200
Case Processing
Summary
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Cases
a. Listwise deletion based
on all variables in the
procedure.
Interpretation: Descriptive statistics is generally used to describe features of data. Use of
descriptive statistics in quantitative research analyses supports the scholar in presenting summary
of the detail. Buying of products from the retailers even if another retailer has sale the health care
product. Mean value of this variable is 3.64. That shows that maximum people are average
agreed that they buy the products from retailers even if retailer has sold it. On other hand another
variable of descriptive analyses is difficulty to buy substitute products. Mean value of this
variable is 4.81 and standard deviation is 1.25. Variance is 1.582. that shows that maximum
people are saying that they are agreed with this point that if particular branch of retailer is closed
then it becomes difficult for the customer to get substitute products. All female clients like to use
only quality beauty products, they can not compromise with quality,. In such condition if
particular retailer shop is closed then it is very difficult for them to get substitute products.
Because substitute products may harm their skin as well.
Researcher has raised the question about sharing of positive experiences of shopping in
retailer through social networking sites. Mean value of this variable is 4.6450. Standard deviation
of this element is 1.8 and variance value is 3.5. From the analysis it can be interpreted that
People are average agreed with this point. Whereas recognition by business to their consumers is
the great variable that helps in making the person loyal towards the brand. Mean value of this
element is 4.5200, standard deviation is 1.52 and variance is 2.321. Paying more efforts to
program member rather than non regular customers is important for customer loyalty program.
Mean value is found 5.20, standard deviation is 1.55 and variance is 2.425. From the discussion
it can be interpreted that if beauty and health care retailers pay more attention on program
members consumers then it may attract them and can help in enhancing their trust. By this way
company can make such people loyal towards the brand. It supports in gaining their attention and
retaining them in the organization for longer duration. Scholar has included variable of better
services and loyalty programs. Then mean value of this variable is found 3.1750, standard
deviation is 1.690, variance is found 2.80. From the analyses it can be interpreted that maximum
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people are agreed that if beauty and health care retailers provide quality services to consumers
then it can support in making people loyal towards the brand. Most of the female buyers like to
buy from such shop from where they can get quality services, if retailer is unable to meet with
their requirements then they do not prefer to go these. Thus, services is the major element which
impact on loyalty program to great extent, by offering quality services to consumers entity can
meet with the requirement of consumers and can make consumers loyal towards the firm.
Communication between program members and store plays significant role for customer loyalty
programs. Mean value is found 4.5, standard deviation is 1.52 and variance is 2.3. From the
discussion it can be interpreted that if health care retailers coordinate with consumers well and
make them aware with the benefits, discounts offer by them effectively then it can make the
loyalty program more successful. By this way clients will become loyal towards the firms and
they will buy particular beauty products from particular retailer.
4.3 Frequencies tables
Interpretation: from the above statistical analyses it can be interpreted that people those who
were 18 above were involved in this study. 89.6% were above 18 year missing value was 1.0. On
other hand it is analysed that 89.6% people were permanent resident of Hong Kong. They use
health care products frequently and they have better experience about beauty and health are
industry of Hong Kong. Furthermore, 89.6% people have experience of purchasing beauty
products from the country, they live in the country since longer duration they have better
experience of products and services of this place so they can give better information about this
sector and loyalty programs. In the statistical analyses it is found that maximum female
candidates have more interest in beauty products and they can help in measuring the Impact of
Customer Loyalty Programs & Mediating Factors on Store Loyalty. 86% people those who were
involved in this study were less than 30 years old. This age group people like to use beauty
products in order to look nice and different from others. Beauty retailers and health care
companies always target to such consumers those who are between 25-30 year. They are the
main target customers because they use such type of beauty or cosmetic products frequently.
Frequency Table
favouritebeautyproduct
Frequency Percent Valid Percent Cumulative
Percent
Valid AEON 99 49.0 49.5 49.5
72

Angel 6 3.0 3.0 52.5
Aster 10 5.0 5.0 57.5
Bonjour 9 4.5 4.5 62.0
City Super/Logon 18 8.9 9.0 71.0
Colormix 12 5.9 6.0 77.0
Joyce Beauty 4 2.0 2.0 79.0
Jurlique 8 4.0 4.0 83.0
Lane Crawford 8 4.0 4.0 87.0
Manning’s 2 1.0 1.0 88.0
Nest Beauty 2 1.0 1.0 89.0
ParknShop 2 1.0 1.0 90.0
Sa Sa 2 1.0 1.0 91.0
Sogo 2 1.0 1.0 92.0
UNY/APITA/PIAGO 3 1.5 1.5 93.5
Watsons 2 1.0 1.0 94.5
Wellcome 2 1.0 1.0 95.5
Wing On 2 1.0 1.0 96.5
Yata 3 1.5 1.5 98.0
other 4 2.0 2.0 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the statistical analyses that 49% consumers like to buy AEON beauty
products, it is their favour product. On other hand 8.9% customers like City super product. They
think that it is the brand name and if they use such high-quality products then they cannot face
any trouble related to health. Furthermore, 5% respondents are like to use Aster health care
products. From the discussion it can be interpreted that maximum people are interested for
AEON beauty products. They buy this product from the retail store mostly. 1.5% people like to
use Yata products.
frequentlyyouviststore
Frequency Percent Valid Percent Cumulative
Percent
Valid Almost Daily 20 9.9 10.0 10.0
At least once a Week 121 59.9 60.5 70.5
At least once a Month 25 12.4 12.5 83.0
73

At least once a Year 18 8.9 9.0 92.0
\Almost Never 16 7.9 8.0 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the discussion it is analysed that 59.9% respondents have replied that they
visit beauty stores and health care retailer stores at least once in a week. That shows that in every
week persons visit to such shops and buy products. On other hand 9.9% answers have answered
that they almost daily visit the stores. 12.4% answers have replied that they frequently visit
stores at least once in a month. From the discussion, it can be interpreted that in every seven days
people visit stores to buy their favour t beauty products. If company offers then high-quality
products that can be beneficial and worthwhile for them then it would support them in making
them loyal towards the brands.
frequencyofshopping
Frequency Percent Valid Percent Cumulativ
e Percent
Valid
Almost Daily 47 23.3 23.5 23.5
At least once a Week 113 55.9 56.5 80.0
At least once a Month 16 7.9 8.0 88.0
At least once a Year 9 4.5 4.5 92.5
\Almost Never 15 7.4 7.5 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the discussion it is analysed that frequency of shopping of health care and
beauty products in each client is different from others. But most of the consumers buy frequently
the beauty products. 55.9% respondents have viewed that they buy such products at least once in
a week. On other hand 23% answers are in favour of almost daily. That means 23% people out of
200 buy such beauty and health care products almost daily. Whereas 7.9% answers have said that
they buy such items at least once in a month. Total 99% are total response and 2 is missing.
iwouldbuyfromretailereveniftheyarehardtoreach
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Frequency Percent Valid Percent Cumulative
Percent
Valid
strongly disagree 21 10.4 10.5 10.5
moderate disagree 110 54.5 55.0 65.5
average 12 5.9 6.0 71.5
netural 14 6.9 7.0 78.5
average agree 16 7.9 8.0 86.5
agree 11 5.4 5.5 92.0
strongly agree 16 7.9 8.0 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the above discussion it is analysed that 54.5% respond at are moderate
disagree that they will buy from retailer if it is difficult to reach to particular retailer. On other
and 10.4% answers are strongly disagreed that they will buy from retailer if it is hard to reach to
particular shop of beauty products. 7.9% participants are strongly agreed that they will buy from
particular shop. From the above discussion it can be interpreted that people like to buy quality
beauty and health care products. If particular retailer is far away from their location then they
will not go to particular shop to buy products.
difficulttobuysubsti
tuteproduct
Frequency Percent Valid Percent Cumulative Percent
Valid
strongly disagree 10 5.0 5.0 5.0
moderate disagree 4 2.0 2.0 7.0
average 11 5.4 5.5 12.5
netural 11 5.4 5.5 18.0
average agree 129 63.9 64.5 82.5
agree 23 11.4 11.5 94.0
strongly agree 12 5.9 6.0 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the above discussion it is analysed that 63.9% respondent are average
agreed that it is very difficult to buy substitute products. On other hand 11.4% answers are
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agreed that it is really difficult to buy substitute items of beauty. From the discussion it can be
interpreted that people like to buy high quality health and beauty products. They do not
compromise with the quality. If they are not getting the right products then they will not buy
substitute items. Because it may affect their skin and health as well. That is why they buy only
such beauty item which suits them more and do not compromise with the quality by purchasing
other item.
sharepositiveexperiencewithothers
Frequency Percent Valid Percent Cumulative
Percent
Valid
strongly disagree 22 10.9 11.0 11.0
moderate disagree 16 7.9 8.0 19.0
average 19 9.4 9.5 28.5
netural 17 8.4 8.5 37.0
average agree 15 7.4 7.5 44.5
agree 102 50.5 51.0 95.5
strongly agree 9 4.5 4.5 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the statistical analyses it is found that 50.5% respondents are agreed that
they share positive experience with others, if they are satisfied with particular products. On other
hand 10.9% people are strongly disagree that they share positive views to others about products
and services. Whereas 8.4% answers were neutral on this point. From the above discussion it can
be interpreted that if people are satisfied with particular retailer and its products and services
then they say positive things to others about the retailers. This supports in mouth publicity and
enhancing brand name of particular shop. It is essential that shop satisfy its consumers because
by this way consumers will share their positive experiences with others that would make the
loyalty program successful.
discountisneccessyforcustomerloyaltyprogram
Frequency Percent Valid Percent Cumulative Percent
Valid not at all important 1 .5 .5 .5
76

avergae important 8 4.0 4.0 4.5
some important 7 3.5 3.5 8.0
very important 10 5.0 5.0 13.0
netural 7 3.5 3.5 16.5
very very important 21 10.4 10.5 27.0
extremely important 146 72.3 73.0 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: When scholar has raised the point about discounts and its relationship with loyalty
programs then 72.3% respondents have answered that discount is extremely important for the
loyalty programs. On other hand 10.4% answers have viewed that it is very-very important.
From the statistical analyses it can be interpreted that discounts is essential for making loyalty
program successful. If health care and beauty products retailer offers attractive discounts to the
consumers then it will support them in attracting new consumers and retaining them with the
firm for longer duration. Discounts creates positive image of particular retailer and people
become loyal towards the firm. Because they can get quality products at affordable rates. Thus,
discounts can make the loyalty programs successful.
freeiteminaccompanyingtopurchasingisimportantforloyaltyprogrm
Frequency Percent Valid Percent Cumulative
Percent
Valid
not at all important 9 4.5 4.5 4.5
avergae important 10 5.0 5.0 9.5
some important 14 6.9 7.0 16.5
very important 127 62.9 63.5 80.0
netural 20 9.9 10.0 90.0
very very important 12 5.9 6.0 96.0
extremely important 8 4.0 4.0 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the statistical analyses it is found that 62.9% respondents have viewed that
it is very important that to provide free items while purchasing goods for loyalty programs. On
other hand 9.9% answers are neutral on this aspect. From the analyses it can be interpreted that if
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particular retailer of beauty products provide free items accompanying to purchase then it would
help the retailer in making the loyalty program successful. By getting free items perception of
customers can get changed for the company and they will share good experiences with others. It
would make people loyal towards the brand and they will become frequent buyers of the
company. There are beauty shops are running in the country but people buy such health care and
beauty products from particular shop in order to get some additional benefits. Free items can
make them frequent buyers of the firm and it will make the loyalty program of the company.
receivingfreecouponisneccesatforloyalty
Frequency Percent Valid Percent Cumulative Percent
Valid
not at all important 14 6.9 7.0 7.0
avergae important 16 7.9 8.0 15.0
some important 14 6.9 7.0 22.0
very important 12 5.9 6.0 28.0
netural 113 55.9 56.5 84.5
very very important 16 7.9 8.0 92.5
extremely important 15 7.4 7.5 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the statistical analyses it is found that 55.9% people are neutral on this point
that receiving free coupons is necessary fort loyalty. On other hand 7.9% answers have said that
it is very- very important. From the discussion it can be interpreted that free coupon is the
scheme which is provided by many retail stores to their buyers. Offering free coupon change the
perception of consumers towards the firm and they become frequent buyers of particular shop.
People like to buy quality beauty and health care products. So they buy products from such shop
from where they can get good products. In such condition if they receive free coupon as well as
it can make them loyal towards the brand. Because they will get other benefits of buying this
product from particular retail shop. Thus, receiving free coupon is necessary for loyalty and it
can support particular retailer that to retain its consumers in the organization for longer duration.
provisionofgiftimportantforloyalty
78

Frequency Percent Valid Percent Cumulative
Percent
Valid
not at all important 13 6.4 6.5 6.5
avergae important 28 13.9 14.0 20.5
some important 123 60.9 61.5 82.0
very important 11 5.4 5.5 87.5
netural 10 5.0 5.0 92.5
very very important 7 3.5 3.5 96.0
extremely important 8 4.0 4.0 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the statistical analyses it is found that 60.9% respondent have viewed that
provision of gift is important to some extent for loyalty. On other hand 13.9% answers have
viewed that it is average important. Whereas 4.0% answers have viewed that it is extremely
important. From the discussion it can be interpreted that gift system attracts new consumers and
make the existing people happy. This supports in enhancing loyalty of clients towards the retail
shop. Thus, if beauty retailers offer gift to its valuable consumers then it would enhance
satisfaction level of them and they will become frequent buyers of the company.
enjoymentofpointcollectionandredemptonisimportamt
Frequency Percent Valid Percent Cumulative
Percent
Valid
not at all important 6 3.0 3.0 3.0
avergae important 6 3.0 3.0 6.0
some important 7 3.5 3.5 9.5
very important 126 62.4 63.0 72.5
netural 22 10.9 11.0 83.5
very very important 20 9.9 10.0 93.5
extremely important 13 6.4 6.5 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the above statistical analyses it is found that 62.4% answers have viewed
that giving extra points and redemption of these points are very important for the loyalty
79

programs. On other hand 9.9% answers have said that it is very-very important. From the
analyses it can be interpreted that people enjoy getting additional points and when redemption of
these points give them monitory benefits. That makes the people loyal towards the retail firm. It
is analysed that most of the retailers give extra points of each purchase to the consumers, they
communicate with them that particular points can be adjusted against their next billing amount.
In order to use these points people buy beauty products from particular retail shop. It makes them
loyal towards the brand and they become frequent buyers of the company. It is beneficial tool
and support the retailers in making its loyalty program successful. By this way retailers can meet
with their objectives.
betterservicesisimportmtnforloyalty
Frequency Percent Valid Percent Cumulative Percent
Valid
not at all important 10 5.0 5.0 5.0
avergae important 6 3.0 3.0 8.0
some important 6 3.0 3.0 11.0
very important 5 2.5 2.5 13.5
netural 9 4.5 4.5 18.0
very very important 18 8.9 9.0 27.0
extremely important 146 72.3 73.0 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the statistical analyses it is found that 72.3% answers have viewed that
better services is extremely important for loyalty. On other hand 8.9% answers have answered
that it is very-very essential to make people loyal towards the entity. From the above analyses it
can be interpreted that customers like to get quality products and services. If entity is unable to
provide good services to them then people may get negative towards the brand. Whereas if
particular retailers offers quality services to consumers and provide them satisfactory services
then it can enhance their loyalty towards the firm. This is the only way that can help in making
loyalty programs successful. If retailers is offering poor services then it will make people
negative and they will share negative experiences to others of buying beauty products from
particular shop. Thus, it bis extremely important that retailers concentrates on providing quality
services in order to make the loyalty program successful.
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payingmoreeffortstoprogrmmemberisimportamttoloyaltyofcosnumer
Frequency Percent Valid Percent Cumulative Percent
Valid
not at all important 14 6.9 7.0 7.0
avergae important 8 4.0 4.0 11.0
some important 7 3.5 3.5 14.5
very important 10 5.0 5.0 19.5
netural 22 10.9 11.0 30.5
very very important 133 65.8 66.5 97.0
extremely important 6 3.0 3.0 100.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: When researcher has raised the point that paying more effort to the program
member rather than non-regular consumers is important for a customer loyalty program. Then
65.8% answers have viewed that it is very-very important that to pay more efforts to program
members as compare to non-regular consumers. On other hand 10.9% answers were neutral on
this point. From the statistical analyses it can be interpreted that beauty and health care products
retailers are required to pay more attention on program members rather than non regular
consumers. Because that can enhance trust and loyalty of program members and they put their
hard efforts to make effective program to attract new consumers and making them loyal towards
the brand. If company pays more attention on these people then they would put their more efforts
to make more attractive loyalty programs. This would support in gaining success and
accomplishing goal of entity.
Iwouldshopatfavourtretailerregardlessoffersprovidedbycompetitors
Frequency Percent Valid Percent Cumulative
Percent
Valid strongly disagree 9 4.5 4.5
moderate disagree 18 8.9 9.0
average 14 6.9 7.0
neutral 13 6.4 6.5
average agree 109 54.0 54.5
81

agree 25 12.4 12.5
strongly agree 12 5.9 6.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
1
Interpretation: From the above discussion, it is analysed that 54.0% respondents are average
agree that they would buy products from their favour t retailers regardless attractive offer
provided by other competitors. On other hand 12.4% answers are agreed that they buy only from
their favour t retailers. From the discussion it can be interpreted that consumers look at the
quality of products and services provided by particular retailer. If they feel satisfied with their
services then they frequently shop products their shops. It supports in making people loyal
towards the retailer and individual after that go to such place again and again to shop such type
of beauty products rather than going to any other competitor store.
2
difficulttobuysubstituteproduct
Frequency Percent Valid Percent Cumulative
Percent
Valid
strongly disagree 10 5.0 5.0
moderate disagree 4 2.0 2.0
average 11 5.4 5.5
neutral 11 5.4 5.5
average agree 129 63.9 64.5
agree 23 11.4 11.5
strongly agree 12 5.9 6.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the discussion it is analysed that 63.9% respondents are average agree that
it is very difficult to buy substitute products. Individual by any beauty products with extra care,
individual think that such items should not harm their health. Once they like any items then they
82

become frequent buyer of such product. After that they do not like to use substitute products. If
retailer offer them satisfactory beauty products then also individual do not prefer to buy such
substitute products. Thus, it is difficult to spend money on substitute beauty and health care
products.
sharepositiveexperiencewithothers
Frequency Percent Valid
Percent
Cumulative Percent
Valid
strongly disagree 22 10.9 11.0
moderate disagree 16 7.9 8.0
average 19 9.4 9.5
neutral 17 8.4 8.5
average agree 15 7.4 7.5
agree 102 50.5 51.0
strongly agree 9 4.5 4.5
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
3
Interpretation: From the above study 50.5% respondents are agreed that they share their positive
experience with others. On other hand 10.9% people are strongly disagreed. From the discussion
it can be interpreted that If people are satisfied then they will share their positive feedback to
others so that they also buy such beauty products and experience the thing. So, retail stores are
required to provide satisfactory products and services to their clients so that they be satisfied and
do mouth publicity of the store. This would support in making the loyalty program successful, by
this way entity will be able to generate more revenues.
iwouldencourageotherstopurchaseinretailer
Frequency Percent Valid Percent Cumulative
Percent
Valid strongly disagree 14 6.9 7.0
moderate disagree 16 7.9 8.0
83

average 13 6.4 6.5
neutral 12 5.9 6.0
average agree 114 56.4 57.0
agree 16 7.9 8.0
strongly agree 15 7.4 7.5
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the above discussion it is analysed that 56.4% consumers are average agree
that they would encourage others to shop from retailers. On other hand 7.9% people are
moderate disagree that they will not motivate others to buy products from particular shop. From
the discussion it can be interpreted that maximum people think that if they are satisfied with
particular retail store then they will say positive things to others about particular retailers. This
helps in encouraging others and making them loyal towards the brand. Loyal customers are the
assets of the firm, if entity is providing quality products and services to them then such people
will encourage others as well to purchase products from specific retail shop.
iamloyaltoretailer
Frequency Percent Valid
Percent
Cumulative Percent
Valid
strongly disagree 14 6.9 7.0
moderate disagree 16 7.9 8.0
average 13 6.4 6.5
neutral 12 5.9 6.0
average agree 114 56.4 57.0
agree 16 7.9 8.0
strongly agree 15 7.4 7.5
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the statistical analyses it is found that maximum people are agreed that
they are loyal towards particular retailer. Loyalty comes when retailer offers satisfactory services
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to their consumers. This supports in retaining people in the brand for longer duration. 7.9%
people are moderately disagreed whereas 7.9% people are agreed and 7.4% respondents are
strongly agreed that they are loyal towards retailer.
discountisneccessyforcustomerloyaltyprogram
Frequency Percent Valid Percent Cumulative
Percent
Valid
not at all important 1 .5 .5
average important 8 4.0 4.0
some important 7 3.5 3.5
very important 10 5.0 5.0
neutral 7 3.5 3.5
very very important 21 10.4 10.5
extremely important 146 72.3 73.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
4
Interpretation: Researcher has asked about discounts is necessary for customer loyalty program
then 72.3% answers have answered that it is extremely important. If companies offer their
consumers discounts then it may help in gaining success and making loyalty program successful.
On other hand 10.4% answers have viewed that it is very-very important. From the discussion it
can be interpreted that discounts supports in attracting new consumers and changing their
perceptions. After giving them discounts, entity change their perception and people can get
quality products at affordable prices. This makes the person loyal towards the brand and help in
making loyalty program successful.
enjoymentofpointcollectionandredemptonisimportamt
Frequency Percent Valid Percent Cumulative
Percent
Valid not at all important 6 3.0 3.0
average important 6 3.0 3.0
some important 7 3.5 3.5
85

very important 126 62.4 63.0
neutral 22 10.9 11.0
very very important 20 9.9 10.0
extremely important 13 6.4 6.5
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
5
Interpretation: 62.4% respondents have answered that enjoyment of point collection and
redemption of points is very important for the beauty and health care retailers. Most of the
people like to buy products from such shops that give them extra points which they can redeem
it. Whereas 10.9% answers have answered that they are neutral on this point. From the
discussion it can be interpreted that person enjoy the benefits of redemption of points. It makes
them positive towards the brand and they become loyal toward particular retailer.
betterservicesisimportmtnforloyalty
Frequency Percent Valid
Percent
Cumulative Percent
Valid
not at all important 10 5.0 5.0
average important 6 3.0 3.0
some important 6 3.0 3.0
very important 5 2.5 2.5
neutral 9 4.5 4.5
very-very important 18 8.9 9.0
extremely important 146 72.3 73.0
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: From the statistical analyses it is found that 72.3% answers have viewed that
better services is extremely important for loyalty. On other hand 8.9% answers are saying that
providing better services is very-very important for the retailer for making loyalty program
successful. From the above discussion it can be interpreted that consumers like to go to such
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shop from where they can get quality products and services. If any retailer is not offering them
better services then it may demotivate them and they may be negative towards them. Thus, by
providing better services to consumers beauty or health care retailers can make people loyal
towards the brands.
advertisementosretailerforprovidinginformationofprovisionofofers
Frequency Percent Valid Percent Cumulative
Percent
Valid
not all satisfied 14 6.9 7.0
some satisfied 16 7.9 8.0
average satisfied 13 6.4 6.5
satisfied 12 5.9 6.0
strongly satisfied 114 56.4 57.0
highly satisfied 16 7.9 8.0
extremely satisfied 15 7.4 7.5
Total 200 99.0 100.0
Missing System 2 1.0
Total 202 100.0
Interpretation: frequency for strongly satisfied respondents for advertisement of retailer for
providing information of the provision of offers. On other hand 7.9% people are highly satisfied
whereas 7.4% answers are extremely satisfied for the advertisement. From the discussion it can
be interpreted that through advertisement retailer can circulate necessary information to
customers and can change their mind to great extent. Advertisement is the promotional tool that
makes people aware with the benefit given by retailer to their consumers. That makes the person
loyal and they become frequent buyers of particular retail shop.
4.4 Cronbach's alpha test
Cronbach's alpha is the statistical analyses test that helps in measuring internal
consistency of variables. It is generally used to measure reliability of variables. It is computed
by correlating scores for each scale with total observed scores. Coefficient between 0.65 to 0.8 is
acceptable whereas coefficient less than 0.5 is unacceptable.
87

Reliability
Statistics
Cronbach's Alpha Cronbach's Alpha
Based on
Standardized
Items
N of Items
.950 .944 57
Summary
Item Statistics
Mean Minimum Maximum Range Maximum /
Minimum
Variance N of Items
Item Means 3.823 1.095 6.305 5.210 5.758 1.840 57
Item Variances 2.303 .086 25.315 25.229 292.978 10.503 57
Inter-Item Covariances .574 -4.881 3.828 8.710 -.784 1.175 57
Interpretation: From the statistical analyses it is found that Cronbach's alpha is 0.950. That
shows high level of internal consistency. It is found that alpha coefficient for 57 items is 0.950.
That means all the items have high internal consistency. It is acceptable and highly reliable.
Cromnbach's alpha reliability coefficient n ranges between 0 and 1. It can be interpreted that
mean value of items is 3.823 and minimum value is 1.095. Maximum value is 6.305, variance is
1.8740 for 57 items. On other and mean value of variance items are 2.303, minimum value is
0.86, variance is 10.503 of 57 items. Mean value of inter item covariance is 0.574 and variance is
1.175
4.5 Chi square test and cross tabulation
88

Case
Processing
Summary
Cases
Valid Missing T
o
t
a
l
N Percent N Percent N Percent
buyingproductsfromretailereven
anotherretailerhassale *
Iwouldshopatfavourtretailerrega
rdlessoffersprovidedbycompetit
ors
200 99.0% 2 1.0% 202 100.0%
buyingproductsfromretailerevenanotherretailerhassale *
Iwouldshopatfavourtretailerregardlessoffersprovidedbycompetitors Crosstabulation
Count
Iwouldshopatfavourtretailerregardlessoffersprovidedbycompe
titors
Tota
l
strongly
disagree
moderat
e
disagree
averag
e
neutr
al
average
agree
agre
e
strongly
agree
buyingproductsfromretailerevenanotherretailer
hassale
strongly
disagree 0 0 4 1 7 0 0 12
moderat
e
disagree
0 0 0 5 4 0 0 9
average 9 18 10 2 40 24 8 111
neutral 0 0 0 0 19 0 0 19
average
agree 0 0 0 0 12 1 2 15
agree 0 0 0 1 22 0 0 23
strongly
agree 0 0 0 4 5 0 2 11
89

Total 9 18 14 13 109 25 12
2
0
0
Chi-Square Tests
Value df Asymp. Sig. (2-
sided)
Pearson Chi-Square 142.808a 36 .000
Likelihood Ratio 136.161 36 .000
Linear-by-Linear Association 7.571 1 .006
N of Valid Cases 200
a. 38 cells (77.6%)
have expected
count less than 5.
The minimum
expected count
is .41.
Interpretation: Chi square test is generally applied to identify relationship between two
categorical variables (SPSS Tutorials: Chi-Square Test of Independence, 2017). It takes support
of contingency table in order to analyses data effectively. Value of person chi-square is found
142.808, likelihood ratio is 136.161, linear by linear association is 7.571. Expected count is less
than 5 and the minimum expected count is .41. It is required that actual frequency needs to be
equal to expected frequency for specified cell versus. There is required that difference in both
frequency greater than zero. Difference in the chi square test is found 36 that shows two
variables are independent on each other.
Case process summary reflects number of valid cases are present here for the analyses.
From the statistical analyses it is found that there are 200 or 99% cases are valid. Missing value
is 2. When cross tabulation has been applied for the variable buying products from retailer even
another retail has sale the product and I would buy product from favour retailer regardless other
competitor provide extra offers then key results in Chi square test table is the person chi square
are such as: the value of person chi square is 142.808. The footnote of this statistic pertains to
expected cell count assumption. From the key results it can be interpreted that expected cell
count is less than 5. The value of asymp. Sig is .000. That shows that both the categorical
90

variables have significant correlation ship. If one variable is getting changed then changes will
be occurred in another variable as well. Chi square test has been applied between two variables
buying products from retailer even another retailer has sale and I would shop favourite retailer
regardless other competitor provide attractive offers. From the statistical analyses key results
found that there is significant co relationship between both these categorical variables. Both are
interrelated thus, null hypotheses are acceptable. Since P-value is less than chosen significance
level thus null hypotheses is acceptable. It shows that there is enough evidence that suggest there
is association between buying products from retailer even if another retailer has sale and I would
shop from favourite regardless offer provided by competitors.
4.6 Mediation and moderation analayses through process macro
Process macro is the tool to analyses regression path for SPSS. It helps in identifying
mediation, moderation in through statistical process. Moderators can be defined as qualitative
and quantitative variables that helps in analysing relation between dependent and independent
variables. Mediator analyses is another aspect in which relation between predictor and criterion
can be identified. On other hand it can be explained as that moderator are such variables that
influence relationship of two variables whereas mediator shows relationship between two and
other variables.
Hypotheses 1: Customer loyalty program is directly and positive contributing to the store loyalty
in the local beauty and health care retailing industry with moderating effect from the price
sensitivity.
Run MATRIX procedure:
************* PROCESS Procedure for SPSS Release 2.16.3 ******************
Written by Andrew F. Hayes, Ph.D. www.afhayes.com
**************************************************************************
Model = 4
Y = LTRevnC
X = RFEloya
M = Sprice
Sample size
200
**************************************************************************
Outcome: Sprice
Model Summary
R R-sq MSE F df1 df2 p
91

.9957 .9914 .0200 22895.9990 1.0000 198.0000 .0000
Model
coeff se t p LLCI ULCI
constant .0394 .0313 1.2592 .2094 -.0223 .1010
RFEloya .9935 .0066 151.3142 .0000 .9805 1.0064
**************************************************************************
Outcome: LTRevnC
Model Summary
R R-sq MSE F df1 df2 p
.2577 .0664 2.0652 7.0085 2.0000 197.0000 .0011
Model
coeff se t p LLCI ULCI
constant 4.7712 .3189 14.9636 .0000 4.1424 5.4001
Sprice -.5127 .7221 -.7100 .4785 -1.9368 .9114
RFEloya .2642 .7205 .3666 .7143 -1.1568 1.6851
******************** DIRECT AND INDIRECT EFFECTS *************************
Direct effect of X on Y
Effect SE t p LLCI ULCI
.2642 .7205 .3666 .7143 -1.1568 1.6851
Indirect effect of X on Y
Effect Boot SE BootLLCI BootULCI
Sprice -.5094 .0693 -.6258 -.3600
******************** ANALYSIS NOTES AND WARNINGS *************************
Number of bootstrap samples for bias corrected bootstrap confidence intervals:
5000
Level of confidence for all confidence intervals in output:
95.00
NOTE: Some cases were deleted due to missing data. The number of such cases
was:
2
NOTE: Some bootstrap samples had to be replaced. The number of such
replacements was:
2990
------ END MATRIX -----
Interpretation: From the above analyses it can be interpreted that there is significant relationship
between price and store loyalty. Relation between store loyalty and price reflects that there is
more than 0.5 significant value.
Hypotheses 3
Run MATRIX procedure:
************* PROCESS Procedure for SPSS Release 2.16.3 ******************
92

Written by Andrew F. Hayes, Ph.D. www.afhayes.com
**************************************************************************
Model = 4
Y = LTRevnC
X = lowqua
M = tyu
Sample size
200
**************************************************************************
Outcome: tyu
Model Summary
R R-sq MSE F df1 df2 p
.2334 .0545 2.2059 11.4038 1.0000 198.0000 .0009
Model
coeff se t p LLCI ULCI
constant 4.9230 .1590 30.9673 .0000 4.6095 5.2365
lowqua -.1995 .0591 -3.3769 .0009 -.3160 -.0830
**************************************************************************
Outcome: LTRevnC
Model Summary
R R-sq MSE F df1 df2 p
.6164 .3799 1.3717 60.3548 2.0000 197.0000 .0000
Model
coeff se t p LLCI ULCI
constant 3.2136 .3030 10.6048 .0000 2.6160 3.8112
tyu -.1185 .0560 -2.1142 .0358 -.2290 -.0080
lowqua .4787 .0479 9.9904 .0000 .3842 .5732
******************** DIRECT AND INDIRECT EFFECTS *************************
Direct effect of X on Y
Effect SE t p LLCI ULCI
.4787 .0479 9.9904 .0000 .3842 .5732
Indirect effect of X on Y
Effect Boot SE BootLLCI BootULCI
tyu .0236 .0228 -.0011 .0956
******************** ANALYSIS NOTES AND WARNINGS *************************
Number of bootstrap samples for bias corrected bootstrap confidence intervals:
5000
Level of confidence for all confidence intervals in output:
95.00
NOTE: Some cases were deleted due to missing data. The number of such cases
was:
2
93

------ END MATRIX -----
Interpretation: From the above anal ayes it can be interpreted that results
supports meditation hypotheses. B=-01995, Se=0.0595 and p<0.5 and
attributional positivity proves here, b= 0.4787, Se= 0.479, P<0.05. This shows
that results are sup[porting hypotheses. That means location and store loyalty
is affected by price image.
4.7 Summary of hypotheses results
By looking at the table it is analysed that Hypotheses 1, 5 and 3 then it is supported
whereas H2 and H4 are supported are partially supported by results.
Hypothesis Statement Statistical Test Results
Hypothesis 1 Customer loyalty
program is directly
and positive
contributing to the
store loyalty in the
local beauty and health
care retailing industry
with moderating effect
from the price
sensitivity.
Chi-square test
Frequency table
Supported
Hypothesis 2 The relationship
between visual
merchandising and
store loyalty is
affected by the
mediation of
communication with
customers.
Cronbach's alpha test
Chi-square test
Cross tabulation
Partially supported
Hypothesis 3 The relationship
between location and
store loyalty is
Cronbach's alpha test
Chi-square test
Supported
94

affected by the
mediation of price
image.
95

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS
5.1 Introduction
Current dissertation measured impact of customer loyalty program and mediating factors
on store loyalty ion the beauty and health care sector. Present study has provided tools and
techniques that have been used to complete this study. Research design, philosophy, approach,
data collection, data analyses etc. have been explained in the research methodology chapter.
Furthermore, above chapters have applied statistical tools in order to test hypotheses. This
chapter discusses impact of loyalty programs and mediating factors on store loyalty. In addition,
Limitation of the study and suggestion for future researchers will be discussed in this chapter.
5.2 Findings
The questionnaire was distributed to 200 respondents those who live in Hong Kong and
are between age 18-35. All the questions that were involved in questionnaire were related with
mediating factors and customer loyalty. Response rate was 99.9% and all have answered on
asked questions without any biass. Scholar has made hypotheses and data is being analysed
regarding impact of loyalty programs and mediating programs on store loyalty in beauty and
health care retaining stores.
Most of the customers like to buy health and beauty care products from retail stores. But
health and beauty retail sector is facing huge competition in the modern era. There ae many
retailers those which are offering similar products and services to consumers (Capizzi, M. T. &
Furguson, 2005). Most of the retailers are taking support of marketing tactics in order to attract
new buyers towards the brand. But people like to buy from such shop from where they are
satisfied. People believe that trust worthy retailer will always offer them right products and
services at affordable rates. They will not misguide them. Health carte products can impact on
their skins and health if these are not good. Thus, they like to buy from their favourite retailers
only.
Hong Kong is the geographical area where herbal products are high in demand. In the
year 2014 this place has been grown due to rising demand of health and beauty care products. As
retailers have to follow complicated process (Carpenter & Fairhurst, 2003). The beauty products
reached to end users from suppliers. In Hong Kong many distribution channels have been
developed in order to enhance satisfaction level of consumers so that user can get products on
time without any complications. From the above study it can be concluded that sales of health
96

and beauty care products are high in departmental stores. People specially focused on their
dedicated brands. Thus, departmental stores concentrates more on loyalty programs. So that they
make make people loyal towards the brand and can retain them in the organization for longer
duration. Customer loyalty plays significant role in the success of organization. If clients are
satisfied with the products and services of outlet then they come again and again and buy
products every time from the same shop (Cavana, Delahaye & Sekaran, 2001). This supports in
enhancing economic condition of the firm and sustaining them in the corporate world for longer
duration. Distributors are taking support of campaigns in order to make the people loyal towards
the firm. These campaigns are helpful and act as marketing technique. By using these tools
companies are able to attract new consumers and enhancing their interest towards products and
services. Visual merchandising and selection of suitable location is helpful in improving loyalty
of consumers. Visual merchandise supports in gaining attention of mass audience and making
them aware with the benefits given by retail stores to them. This attracts new buyers towards the
entity and retain existing consumers in the organization for longer duration. Most of the time
retail stores are offering rewards and discount point to consumers. This is included in the loyalty
programs. In this reward system consumer gets benefits of redemption of rewards against the
bill. It makes the person habitual because in order to get this benefit individual continuously buy
products from the same retailer. This helps in enhancing sales volume of the organization. It
enhances economic position of the firm and supports in making loyalty to consumers to wards
entity (Cervellon & Coudriet, 2013).
From the above dissertation it can be concluded that price sensitivity impact on the
business unit to great extent. Price influences the mind of consumers and can make them
frequent buyer of outlet. If any retailer is providing quality products to consumers at affordable
rates then individual like such retailers and buy net time as well from the same shop. However,
consumers like to purchase health and beauty care products from such shop from where they are
convenience to re-patronize. Mouth publicity matters a lot. If individual is satisfied with
particular shop then the customers do mouth publicity for the product and services. Mouth
promotion is the best tool through which others consumers can get to know about the shop and
they can experience products and services of particular company. It is the good indicator of
attitudinal loyalty. There are many social networking sites on which people discuss about
products and services of particular firm with their friends and relatives. This type of marketing
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strategy supports in enchaining brand image and making people loyal towards the brand.
Exchange of positive information can help the retailers in attracting new consumers and making
them loyal towards the brand (Chandon, Wansink & Laurent, (2000)). On other hand if someone
is doing negative mouth publicity then it also affects overall loyalty program of retailer.
Communication with customers play significant role in the success of business unit. If
retailers is communicating with its consumers effectively then it may support in making them
aware with the benefits for them offer by company. This supports in making loyalty program
successful. Visual merchandising is considered as one of the effective element for customer
loyalty. Making the display more attractive creates positive image in the mind of consumers and
they think to get experience of its services. On other hand if display of the outlet is not good then
it affects overall working of the company to great extent. Visual merchandise supports in
grabbing attention of consumers and they become positive towards the retail stores. Location of
outlet matters a lot, if retailer has opened its shop at most visible place then it supports in attract
more people towards it. Most of the people buy health and beauty care products from their near
stores because they think that they will provide them quality products.
From the above study it can be concluded that customer loyalty programs directly impact
on the store loyalty to great extent (Charania, (2011).). It is found that retailers those who offer
quality products at affordable rates to consumers. Then consumers believe in such shop keepers
and they buy their products from them again and again. If customer loyalty programs are
effective and health and beauty care shop would be able to attract new consumers towards the
brand and would be able to make people loyal towards the retail store. Price sensitivity matters a
lot. If distributor has involved rewards and discounts system in its loyalty programs. They it
would be beneficial for the consumers because they will get products at reasonable prices. By
this way they will be positive towards the firm and will become frequent buyers of the entity.
Both these variables have related with each others. If loyalty programs of the company is not
good then it would not be able to attract new buyers and retain them in the outlet for longer
duration. Receiving fee coupons, gift vouchers, points, rewards, discounts change the mind of
people and they think to experience the facilities of the entity. If customer loyalty program is
effective and contribute well to the store loyalty of consumers then retailer can be able to attract
mass audience to sell health and beauty care products. In such condition individual can reduce its
prices this will also give more benefit to the shop (Capizzi & Furguson, 2005).
98

From the discussion it can be articulated that visual merchandising and store loyalty have
relationship. They both impact on each others. If company is communicating with consumers
properly then retailer would be in position to convenience people. By this way buyers will
become loyal and frequent customer of the company. If visual presentation and display of the
entity is good then it would be able to attract consumers and making them positive towards the
brand (Carpenter & Fairhurst, 2003). But this do not major impact on customer loyalty. Because
consumers like to buy the products from where they get satisfactory services. If visual
merchandising of the company is good but it is unable to provide quality services to consumers
that are provided by other shops then it would not be able to make them loyal towards the outlet.
Healths and beauty care products are major used by female they purchase items from the trust
worthy place. If at the first time they do not get satisfactory services then they can become
negative towards the firm and they will share their negative experience with their friends and
relatives.
From the above study it is found that location and store loyalty are interrelated because
loyalty of consumers are related with the location (Charania, (2011)).
5.3 Decision stage
From the above study it can be concluded that in the modern era competition is too high
and companies have to struggle a lot to maintain their position in the market. Customers are the
life blood of business, if retailers are unable to satisfy them then they may move towards the
other brand easily. Hong Kong is the place where population is much more concern for their
beauty and health. They like to buy from such retailer from where they can get satisfactory
services. From the above discussion it can be articulated that customer loyalty is the re-patronize
behaviour of consumer from a same store. If people are satisfied with particular shop then
individual will buy the same product from same retail store. This shows loyalty of individual
towards particular place. But for that it is essential for the retailers that to provide satisfactory
services to clients so that individual can change their perception and can become frequent buyer
of particular store.
Providing discounts is necessary for customer loyalty programs was the first hypotheses.
From testing results were found in favour that customer loyalty programs and discounts are
highly related to each others. If retailers are offering attractive discounts to their clients then it
99

can support such retailer in changing mind of consumers and making them positive towards the
firm. It is the great tool that assist in enhancing satisfaction level of consumers and attracting
new customers towards the brand. Customer loyalty and discounts are interrelated aspects.
Retailers has to design attractive discount offers for the clients in order to gain their attention. By
this way people can become frequent buyers, this supports in gaining competitive advantage to
the business unit.
Another hypotheses formulated in this study was that people buy beauty products from
favourite retail shop even if retailer has sale. From the statistical analyses and literature review it
can be concluded if retailers are providing people satisfactory services then people can buy
beauty products in future again from the same retailer. In such condition they go to the same
place to purchase the same beauty items even if retailer has sale. Furthermore, third hypotheses
was providing better services is important for loyalty programs. Researcher has applied statistical
analyses test to test these hypotheses. From the analyses it can be concluded that products and
services are the main element that can change perception of consumers towards the company.
Hong Kong is the country where many beauty and health care retailers are operating their shops.
They ensure that they provide quality products and services to their clients so that they become
loyal towards the brand and they share positive experiences of purchasing from the retail stores
with others. If retailers provide quality services to their consumers then it may make loyalty
program successful. It is essential for shops that to pay attention on services for loyalty
programs. That can enhance trust of consumers and they will be loyal towards the company, this
can make the loyalty program successful and profitable for the entity.
Towards the store loyalty the customer loyalty program is directly and positively
contributing in the local beauty and health care retailing industry. By this industry the rewards
are being offered to the customers who frequently make hire-purchase free merchandise,
rewards, coupons or even advance released products are being given to customers through these
loyalty programs. By the medication with customers the relationship between visual merchandise
and store loyalty is affected( Thyne, Davies & Nash, 2004). By the medication of price image
also the relationship between location and store loyalty is affected. The store loyalty is being
improved through the customer loyalty programs. In order to yield the improvement to the store
loyalty as well as to enable the returned customers the visual merchandise should have a function
in facilitation the communication with customer. On the patronise decisions and behaviours the
100

role of visual themes and first sight on visual themes have large impact. In comparison with
active safe thought verbal communication the passive visual images travelled through the sights
and retained in the memory of receivers for a longer period of time. In order to gain points the
customer were discovered to increase their patronise volume for rewards .The store satisfaction
of the customer would be affected by the customer loyalty programs. Towards the store loyalty
in the local beauty and health care retailing sector the customer loyalty program is directly and
positively contributing (Uncles,1994). As per the frequency table it is been shown that the beauty
products stores are being visited by the pole at least once in a week are around 59.9% so this
means that customers are highly interest in the purchasing of the beauty products. In this analysis
about 54.5 % of the participant moderately disagree that they will purchase from the retailer even
if it is complex to reach to specific retailer. The customers do not compromise on the quality of
the product while purchasing the beauty products from this industry. They want to buy high-
quality products .The substitute products will not be purchased by them if they will not be
getting their right product. As per the analysis it was found that about 63.9% of the participants
said that it is not possible for them to purchase the substitute products. These beauty items are
related with the skis and health of the customers so they are very conscious towards it and they
want to buy the same product as any wrong product may affect their skim and health as well. The
product that suits to their body or health is being purchased by the customers. They want high-
quality product for their skin and health that will have no negative impact on them. While
making decision to purchased any product the discount is important for customer loyalty
program (van Herpen & Pieters, 2002). In the analysis it was also found that about 72.3% of the
respondents said that in the customer loyalty program discounts is extremely important. In order
to make the customer-loyalty program a success the discounts need to be given by the beauty
and health care industry. This will help the industry to increase the number of customers and also
the sales of the company will also increase from this. If this industry that is beauty and health
care offer attractive discount to the customers then there will be chances of retaining the
customers with the firm for longer time. Due to discount that is being given to the customers the
pole will become loyal towards the firm as they will get good-quality products at an affordable
price. In order to increase the customer this industry need to offer discount to its customers as
the decision to purchase a product or not is made by the customer mainly through the discount
or through customer-loyalty programs offered by this industry. It is also found while making
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decision whether for purchasing beauty products the customer also see whether the free gifts are
being offered in the loyalty program or not. From the analysis that is being done it is disclosed
that about 60.95 of the participants think that to some extent for the loyalty the provision of free
gifts is essential .The process of offering gifts to customer will make the customer happy and
also with this the new customers will be attracted. The satisfaction level of the customers will
increase if the retailers offer free goods to its valuable and old customers. This will increase the
chances of visiting the store again and again and the industry will be benefited from this. In
order to make purchasing decision the points system also work in the loyal programs. This is the
one of the most common methodology that can be used by this industry in order to retain its
customers .The points are being earned by the frequent customers and in some type of rewards
these points can be translated. In order to understand and calculate the point system will be easier
for the customers (Villanueva, Yoo and Hanssens,2008). For an instance for the $10 purchase the
company will offer one point to its customers. In the future purchase these points can then by
redeemed for discounts. This will not only increase the spend per customer but also encourage
them to invests in the brand .For an instance if the customer purchase the mascara for $45 then
they could add $10 make-up remover in order to get those $ 5,00 points. From the analysis that is
been don it is also discovered that about 62.4 % of the respondent think that point system is
essential for the loyalty program. For the loyalty programs to become successful this industry
need provide excellent services to its customers. The store will not be visited by the customers if
the services that is being given to them is poor. In order to repeat customary again and again
their trust this industry that is beauty and health are need to offer high-quality services .This will
have a positive impact in the image of this industry .The high-quality services need to be given to
the customers through these customer-loyalty programs. It is also being disordered in the
analysis that it is essential that more attention and efforts need to be paid on the program
members in comparison to the non-regular consumers(Viola et al., 2013. ) . As the more efforts
will be made by these people in order to make this loyalty programs successful.
In order to increase the number of customers and sales this industry need to provide the customer
loyalty programs as this is the best tool that can be used by the organization in order to attract
more customers. The discounts, points, coupons, better services etc need to be given to the
customers in order to increase the number of customers at this store. The high-quality products
need to be provided by this industry as while purchasing beauty product and health products
102

only the good quality is being seen by the customers(Virgona, 2012. ). For the customers it is not
any easy to fund substitute for these items as they think this may affect their skin and health. So,
the same beauty and chatty items will be used by them. The industry need to offer some
excellent serveries to the customers so that they feel happy with the services which is being
given to them and also they will visit this store next time. This will retain the number of
customers from visiting the store again and again.
5.4 Summary of findings
Above findings can be summarized as customer loyalty plays significant role in the
success of business unit. Each firm aims to gain loyalty of consumers so that it can retain people
in the organization for longer duration. From the descriptive analyses it is found that consumers
are average agreed that they will buy beauty products from retailer even if another retailer has
sales it. It is found that maximum people are strongly satisfied that frequency of promotion of
health care products given by stores to consumers make them loyal and satisfied towards the
brand. Cronbach's Alpha has supported in analysing reliability of data that have helped in getting
accurate results for the research hypotheses and questions. From the mediator and moderation
tools it is found that discount is the great option that support in changing mind of consumers. If
beauty and health care retailers offer attractive discounts to their clients then it can make them
loyal clients and can force them to buy in future as well from the same store.
Other than that from the hypothesis 1, it can be concluded that customer loyalty is one of the
factor which is highly influence over the store loyalty in the local beauty and health care
retailing. When it comes to the customer loyalty, there are several factors which have great
impact over the loyalty of the customers such as quality of products and services, store location,
store infrastructure, other services such as online and card payment etc. In order to gain loyalty
of the customers, organization have planned the different programs such as when the customer is
going to buy the product, some points will be added to every purchase of product. When the
customer reach to the maximum limit points, he or she can redeem to it and can get discount, pay
back etc. This activity have great influence over the store loyalty of the customers. Thus, it can
be said that customer loyalty program and store loyalty goes parallel. The rate of people who
prefer to make their purchase online has increase as they are able to make proper comparison on
the business and to take up purchase decision.
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From the hypothesis 2, it can be summarised that visual merchandising and store local
have very good relationship and it has been affected by the mediation of communication with the
customers. Such as when the customer went for the store to buy a specific product but he is not
able to find it or reach to that product. In that case he or she will frustrate and will not buy the
same product. On the other hand, when the customers visits to the store location and easily find
the product which he or she wants, in that case he or she prefers to buy the product. And iot can
happen that customer will come in future to buy the same product because it is feasible to him or
her. Thus, it can be said that visual merchandise and store loyalty have good relationship with
each other. On the other hand, when it comes to communication between the store employee and
customers, they need to communicate with the effective manner so that customers quarries can
be solved easily. Other than that when the customers do not find the product which he or she
wants, then it is responsibility of the employee to ask Sir/Ma'am what do you want. This will
attract the attitude of the customers as well as they can become loyal for the store. When a
person is able to feel the product, then the trust that they develop within their mind will positive
when compared with the product that is just visual merchandising. However, it is identified that
people prefer to make use of the services that are delivered to then online is effective as it helps
them to save time. However, the rate of trust that they have on it is low and so there are people
who do not make purchase online. Further, the business need to focus on the issues that are faced
by people online so that they are able to develop positive perception within the mind of
customers.
From the hypothesis 3, it can be concluded that when the customers have less spending or
buying power, this will affect the store loyalty with the perceived low price image. When the
customer find that the competitor products and services have the similar price tags, then only the
customers can become loyal for the organization. Other than that it have been founded that there
is big connection between the price image and value of location. With that it can be concluded
that the positive effect to the price image and store satisfaction from the selection of the
particular place of store establishment. Such as when the store is in very much Posh area, it is
being known that price of the product and services will be high. There are certain set of
expectations that customers develop. In this context, when the rate of price that are set by the
firm is positive, then people develop positive perception within the mind. Further, the set of
expectations that individuals have are satisfied, then it becomes favorable enough to change them
104

from regular to loyal. Further, firm need to conduct regular research and survey so that they are
able to focus on the business and the set of issues that are faced by them. When management take
up appropriate steps to focus on the problems that are faced by service users, then they are able
to attain their goals and objectives effectively.
5.5 Recommendations
There are several recommendations that can support in increasing sales volume of entity
and making them loyal towards the brand. These are explained as below:
 Beauty and health care retailers should provide attractive discounts to customers. This
can help them in making loyal and frequent buyers of the store. Buy this way entity can
enhance its revenues and can be able to accomplish its goal soon.
 As there is strong relationship between loyalty programs and improvement of customer
loyalty thus, stores should design effective loyalty programs in which they should pay
attention on price sensitivity. This can gain attention of customers and they can become
loyal towards the brand. This is the way through which effectiveness of loyalty programs
can be enhanced.
 Beauty and health care retailers should concentrates on needs of consumers and quality of
products. If both these elements are included in loyalty programs then it can support in
making loyalty program successful and increasing satisfaction level of customers.
5.6 Limitation and direction for future research
From the above study on measuring impact of customer loyalty programs and mediating
factors on store loyalty, it is analysed that there are certain limitation of the dissertation. There
are some limitation as well. Study has focused more on loyalty programs rather than factors that
need to included in loyalty programs. Furthermore, study could have concentrated on developing
relationship between retail stores and customers. In future scholar can concentrate on developing
relationship between customers and stores in order to make them frequent and loyal buyer. In
addition, effectiveness of price sensitivity and discounts need to be looked on in the future.
Furthermore, researcher can pay attention on thematic analyses on the same subject in order to
measure the effectiveness of loyalty programs in order to make people loyal towards beauty and
health care retailers.
105

5.7 Summary and conclusion
From the above study it can be concluded that loyalty of customers are very important
and it can support entity in gaining success. Each firm tries to attract consumers and retain them
in the business unit for longer duration. If particular retailers is providing satisfactory quality
products and services to them then they become loyal towards the store and frequently buy
products from particular retailer. Effectiveness of loyalty programs impact a lot on the success of
business unit. Above dissertation can be summarized as if people do mouth publicity then it can
attract new consumers as well and can support in increasing sales volume of entity. But for that it
is essential that people feel satisfied, for that companies are required to design their loyalty
programs more effective so that it can meet with the needs of consumers.
106

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APPENDIX
A Study of measuring the Impact of Customer Loyalty Programs & Mediating Factors on
Store Loyalty in the Beauty & Health Care Products Retailing Stores in Hong Kong
Instruction: Please fill in the appropriate box for each question.
Pre-condition questions:
A) Are you 18 years old or above?
□ Yes
□ No
(Adult only, please do not proceed if your choice is “No”.)
B) Are you a permanent resident of Hong Kong?
□ Yes
□ No
(Hong Kong permanent resident only, please do not proceed if your choice is “No”.)
C) Do you live in Hong Kong?
□ Yes
□ No
(This research is tailored for Hong Kong, please do not proceed if your choice is “No”.)
D) Do you have experience in the purchase of Beauty and Health Care Products in Hong
Kong?
□ Yes
□ No
(This research is tailored for a participant who has experience in purchasing Beauty and
Health Care Products, please do not proceed if your choice is “No”.)
Part 1: Personal Data
Questions: Options:
Are you a male or a female? 19. Male
20. Female
□
□
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21. Other □
How old are you? 11 Less than 30
111 31 to 40
111 41 to 50
111 51 to 60
111 Over 60
□
□
□
□
□
What is your Marital Status? 54. Single
55. Married
56. Other
□
□
□
What is your current Monthly
Income? (individual)
d. Below HKD$15,000
e. HKD$15,001 to HKD$25,000
f. HKD$25,001 to HKD$35,000
g. HKD$35,001 to HKD$45,000
h. Above HKD$45,000
□
□
□
□
□
What is your Highest
Education Qualification?
f. Completion of Primary Education or
Below
g. Completion of Secondary Education
h. Completion of Diploma/ Higher
Diploma/ Associate Degree
i. Completion of Bachelor Degree
j. Completion of Master Degree
k. Completion of Doctoral Degree
□
□
□
□
□
□
Which one is your Favourite
beauty and health care
products retailer?
d. AEON
e. Angel
f. Aster
g. Bonjour
h. City Super/Logon
i. Colormix
j. Joyce Beauty
k. Jurlique
l. Lane Crawford
□
□
□
□
□
□
□
□
□
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m. Manning’s
n. Nest Beauty
o. ParknShop
p. Sa Sa
q. Sogo
r. UNY/APITA/PIAGO
s. Watsons
t. Wellcome
u. Wing On
v. Yata
w. other
□
□
□
□
□
□
□
□
□
□
□
How frequently do you visit
your Favourite Store?
u. Almost Daily
v. At least once a Week
w. At least once a Month
x. At least once a Year
y. Almost Never
□
□
□
□
□
How frequently do you shop at
your Favourite Store (in-
person)?
g. Almost Daily
h. At least once a Week
i. At least once a Month
j. At least once a Year
k. Almost Never
□
□
□
□
□
How frequently do you shop at
your Favourite Store
(online)?
f. Almost Daily
g. At least once a Week
h. At least once a Month
i. At least once a Year
j. Almost Never
□
□
□
□
□
Do you participate in any kind
of beauty and health care
products retailer’s loyalty
program? (point
accumulation is loyalty
f. Yes
g. No
□
□
128

program, example
Octopus Card in Hong
Kong)
Are you a member of beauty
and health care products
retailer’s loyalty
program? (example
holding an Octopus Card
in Hong Kong)
f. Yes
g. No
□
□
Part 2: Accessing the Measures of Store Loyalty
All of the following questions are specific to the loyalty action with your favourite beauty and
health care products retailer.
Please rate in between 'strongly disagree' (1) and 'strongly agree' (7).
Statements: Options:
I would buy the beauty and health care related product from
the retailer even if another retailer has a sale.
I would shop at the favoured retailer regardless the offers
provided by the competitors.
I would buy from the retailer even if they are hard to reach.
If the particular branch of the retailer is closed, it is difficult to
find the substitution.
I have never considered switching to another retailer.
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
I would tell the persons in my social network about the
positive experience of shopping in the retailer.
I would convince the persons in my social network to change
their retailer because of my positive experience from my
favour retailer.
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
129

I would say positive side about the retailer to others.
I will make a recommendation about the retailer if a person is
seeking for my advice.
I would encourage others to purchase in the retailer.
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
I would consider myself as a regular customer of the retailer.
I am loyal to the retailer.
I would consider the retailer as the first choice in the selection
of the beauty products.
I would like to purchase more in the future.
I would consistently and continuously purchase beauty and
health care related products from the retailer.
I make most of the purchases in the retailer.
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
Part 3: Accessing the Measures of Customer Loyalty Program
All of the following questions are specific to the attribution of loyalty rewards to you.
How important are the following rewards to you?
Please rate between 'not at all important' (1) to 'extremely important' (7).
Questions: Options:
I think the discount provided is necessary for a customer loyalty
program.
I think the free item in accompanying to the purchasing is
important for a customer loyalty program.
I think the receiving of the free coupon is necessary for a
customer loyalty program.
I think the provision of the gift voucher is important for a
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
130

customer loyalty program.
I think the enjoyment of point collection and redemption is
important for a customer loyalty program.
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
I think the better service offered by the stores to the program
members is important for a customer loyalty program.
I think paying more effort to the program member rather than
non-regular consumers is important for a customer loyalty
program.
I think the personal communication between the program
members and the store is important for a customer loyalty
program.
I think the personal welfare of the program members is
important for a customer loyalty program.
I think being recognised by the business is important for a
customer loyalty program.
I think cultivation of the sense of belonging is important for a
customer loyalty program.
I think trust among the program members and the store is
important for a customer loyalty program.
I think being considered as unique by the business is important
for a customer loyalty program.
I think the closeness between the program members and the
retailer is important for a customer loyalty program.
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
Part 4: Accessing the Measures of Price Sensitivity
All of the following questions are specific to price sensitivity.
Please rate in between 'strongly disagree' (1) and 'strongly agree' (7).
Statements: Options:
I would shop based on the price of the product. 1 7
□ □ □ □ □ □ □
131

I would shop for the special offers.
I can accept lower quality if the price is low.
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
Part 5: Accessing the Measures of Communication with Customers
All of the following questions are specific to the communication between you and your favourite
beauty and health care products retailer.
What is your level of satisfaction?
Please rate in between 'not at all satisfied' (1) and 'extremely satisfied' (7).
Questions: Options:
The advertisement of the retailer for providing information of
the provision of offers
The communication channels established by the store in
facilitating information flow
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
Part 6: Accessing the Measures of Visual Merchandising
All of the following questions are specific to the visual merchandising of your favourite beauty
and health care products retailer.
Please rate in between 'strongly disagree' (1) and 'strongly agree' (7).
Statements: Options:
The store layouts of the retailer are properly designed.
The design of the display of the store is aligning to the
theme properly.
1 7
□ □ □ □ □ □ □
1 7
□ □ □ □ □ □ □
Part 7: Accessing the Measures of Price Image
All of the following questions are specific to the price image of your favourite beauty and health
care products retailer.
132