H&M Case Study: Customer Loyalty Effect on Organizational Profit

This case study investigates the effect of customer loyalty on organizational profit within the fashion industry, focusing on H&M. It begins by establishing the importance of customer loyalty for businesses, highlighting its role in repeat purchases and positive referrals. The research aims to identify the impact of customer loyalty on H&M's profitability by addressing key objectives such as understanding the concept of customer loyalty, developing strategies to enhance it, and measuring its impact on H&M's profit. The literature review covers the definition of customer loyalty, strategies for enhancing customer loyalty like gathering feedback and providing rewards, and the impact of customer loyalty on profitability, emphasizing how loyal customers contribute to increased sales and positive brand image. The research methodology employs a deductive approach and an experimental research design to examine the relationship between customer loyalty and profitability, using qualitative methods for data collection and analysis. The study ensures validity and reliability through appropriate sample selection and utilizes charts and tables for data analysis. Desklib provides a platform for students to access similar solved assignments and past papers.

Research methods

Table of Contents
Title: An assessment of the effect of customer loyalty on organizational profit in fashion industry: A case
study of H&M.............................................................................................................................................3
Rational of study.........................................................................................................................................3
INTRODUCTION.....................................................................................................................................s3
Research Aim:.........................................................................................................................................3
Research Objectives:...............................................................................................................................3
Research Questions:................................................................................................................................4
Literature Review:.......................................................................................................................................4
Research Methodology................................................................................................................................5
Research Approach:.................................................................................................................................5
Design:....................................................................................................................................................5
Methods:..................................................................................................................................................6
Validity and reliability:............................................................................................................................6
Data and analysis:....................................................................................................................................6
REFERNCES..............................................................................................................................................8

Title: An assessment of the effect of customer loyalty on organizational profit in fashion
industry: A case study of H&M
Rational of study:
Now, customer loyalty has become a crucial aspect for business as customers are
regarded as one of the vital stakeholders for business. Loyal customers do not only purchase the
product from company but also refer others to buy the brand. It provides higher competitive edge
to organization so that they can stay at market place for longer duration. Main aim of present
study is to understand the significance of loyal customers for betterment and growth of business.
With this vast, knowledge researcher will be able to prepare appropriate strategies in terms of
formulating loyal customer base. With the study, researcher can significantly contribute in
enhancement of sales and profitability of organization. It will bring ample of growth
opportunities for investigator that will help in growing personal as well as professional career.
INTRODUCTION
In current time, customers are considered as crucial part of business so it is vital to gain
their higher trust as well as loyalty so that they stay with company for longer run. Customer
loyalty refers the frequency of customers of buying a particular product & service. When
customers develop preferences about a particular brand then they are more likely to stick with
that brand for longer run (Izogo, 2017). In fashion industry, consumer loyalty is really crucial
and helps to enhance the overall level of sales and profit margin of business. In the current
project H & M is considered which is a renowned company of fashion industry. It deals in a
various products such as clothes, accessories and more. It was founded in the year of 1947 and
presently working in 74 countries. The present study aims to identify the impact of loyalty of
customers over profit margin of organization.
Research Aim: “To identify the effect of customer loyalty on organizational profit in
fashion industry”: A case study of H&M
Research Objectives:
 To acknowledge the concept of customer loyalty in business
 To develop strategies for enhancing loyalty of customers towards the selected brand

 To measure the impact of customer loyalty over profitability of H & M
Research Questions:
 What is the concept of customer loyalty in business?
 What are the strategies for enhancing loyalty of customers towards the brand?
 What is the impact of customer loyalty over profitability of H & M?
Literature Review:
The concept of customer loyalty in business
According to Sarah Chambers, (2020), Customer loyalty is likeliness of customers of
frequently purchase form a particular company or brand. It occurs when customers are highly
satisfied from a brand. It is often seen that loyal customers are more likely to even pay extra
amount for purchasing preferred product & service. They pay for their positive experience,
quality and their faith over brand. In addition, loyal customers do not switch over other brands
for longer period of time. They also tend to refer the brand to other family members, friends
which is a better way of word of mouth marketing. So, in current time all the companies strive in
order to maintain loyal customer base by providing them overwhelming experiences.
Strategies for enhancing loyalty of customers towards the selected brand
According to Lisa Furgison, (2017), there are ample of strategies cab be used in order to
enhance loyalty and trust of customers towards brand. For this, managers are required to take the
feedback, suggestions of buyers so that they can improve products & services accordingly. By
this way, customers think that they are important part of company which is vital for motivating
customers to do repetitive purchase. In addition, organizations also required to provide
appropriate rewards to customers such as discount, shopping vouchers and more. It helps to grab
the attention of customer and retain them with entity for longer run. In this context, managers of
H & M are required to provide positive experiences to customers by asking their opinion, taking
feedbacks, providing post sales services and more. These all techniques will help in building
trust, faith and loyalty among target segment for further betterment of business.

Impact of customer loyalty over profitability of H & M
According to Kay Lim, (2018), customer loyalty is vital for enlarging business at large
level. It is analyzed that loyal customers tend to purchase products & services of company
frequently. In addition, they also refer it to others. By this way, loyal customer helps to build
positive image of organization in market place. So, loyal customers are crucial to bring more
customers for inflating current level of sales & profitability of entity. In reference of H & M,
loyal customers of entity purchase products frequently and also suggest others to get associated
with brand. By this way, company is able to strengthen its current market position that will
inflate current level of sales & revenue.
Research Methodology
It is considered as a specific process which is used in order to collect, analyze as well as
interpreted information in systematic manner. It includes a lot of steps by which investigator
reach at meaningful conclusion. It clearly defined the way which needs to use by investigator
while conducting research. For this purpose, different steps of research methodology are
described as under:
Research Approach: Research approach is regarded as the plan and procedure by which
data is collected, analyzed and interpreted in significant manner. It is majorly based on the type
of problem and issue which is going to be addressed through research. For the purpose of data
analysis, there are two type of approaches such as inductive and deductive are used. Inductive
approach is based on development a new theory and concept (Daniel, 2018). It is related to
quantitative approach of research. On other side, deductive approach is based on testing the
available theory. There is more emphasis on causality to get appropriate results. In the present
study, the selective approach is deductive approach which will help to get required outcomes in
an efficient manner.
Design: Research design is regarded as the framework which is selected by researcher for
conducting the whole research in an efficient manner. There are a lot of research designs can be
used by investigator which are given below:

 Descriptive research design: It is completely based on theoretical aspects where
researcher is required to describe the whole topic in detail manner.
 Correlation research design: Under this, investigator usually put efforts to establish
relationships in two different variables.
 Experimental research design: In this, relationship is established in cause and effect on
particular aspect. It can be a field, controlled or quasi experiment in which researcher
often examine the impact of in depended variable over dependent one (Gruszczyński,
2018).
 Diagnostic research design: Under this, researcher tries to measure the reason of a
certain situation and phenomenon. It helps to get detailed information about the problem
that will further help to resolve the issue in an efficient manner.
For current research, experimental research design is considered by researcher in order to
examine the impact of customer loyalty over profitability of company which is a dependable
variable.
Methods: It refers to the way by which an investigator collects as well as analyzes the
data. There are majorly two types of methods are used in research such as quantitative and
qualitative. Quantitative methods are considered as a numerical approach under which different
statistical as well as mathematical techniques are used for data collection and interpretation. On
other side, qualitative methods are considered as collection of detailed information for
undertaking research in appropriate way (Li and Chu, 2018). In the current report, qualitative
method is used that will help to gather in depth information from respondents. Main reason to
use this method is to get some additional information which will assist researcher in further
research.
Validity and reliability: This concept is used to measure the quality of research. There
are different techniques, tools used in research thus validity is related to accuracy of particular
measure which is being used in research. In the current report, researcher will used qualitative
approach in which data will be collected through respondent. In this researcher will ensure to
select appropriate samples that will represent the whole population in true manner.

Data and analysis: Data analysis is really important for research under which different
tools, techniques are used for analyzing data in an appropriate way. In the current research,
charts, tables will be use for data analysis.

REFERNCES
Books and Journals
Daniel, B.K., 2018. Contestable professional academic identity of those who teach research
methodology. International Journal of Research & Method in Education, 41(5), pp.548-
561.
Gruszczyński, M., 2018. Financial microeconometrics as research methodology in corporate
finance and accounting. In Efficiency in Business and Economics (pp. 71-80). Springer,
Cham.
Izogo, E.E., 2017. Customer loyalty in telecom service sector: the role of service quality and
customer commitment. The TQM Journal.
Li, X. and Chu, S.K., 2018. Using design-based research methodology to develop a pedagogy for
teaching and learning of Chinese writing with wiki among Chinese upper primary school
students. Computers & Education, 126, pp.359-375.
Lourie, M. and Rata, E., 2017. Using a realist research methodology in policy
analysis. Educational Philosophy and Theory, 49(1), pp.17-30.
Online
The importance of customer loyalty, 2020, [Online], Available through <
https://www.nicereply.com/blog/the-importance-of-customer-loyalty/>
5 ways to increase customer loyalty, 2017, [Online], Available through<
https://blog.fivestars.com/5-ways-to-increase-customer-loyalty/>
Rethinking Your Approach to Customer Loyalty and How it Can Impact Your Business, 2018,
[Online], Available through< https://solvvy.com/blog/rethinking-approach-customer-loyalty-can-
impact-business/ >