Dissertation: Service Quality Impact on Customer Loyalty at ASDA

This dissertation investigates the relationship between service quality and customer loyalty within the UK grocery food retailing sector, with a specific focus on ASDA. The research explores the significance of service quality and customer loyalty for organizational development, emphasizing the need for high-quality service to retain customers. The study includes an introduction outlining the research aim, objectives, and questions, followed by a literature review examining customer loyalty, its attributes, and the impact of service quality. The methodology section details the research approach, and the results, discussion, and conclusions provide insights into the relationship between service quality and customer loyalty, with recommendations for enhancing customer loyalty. The study identifies the problem of ASDA's declining customer loyalty and aims to analyze the influence of service quality, offering recommendations to improve customer retention, productivity, and profitability.

Dissertation
(The influence of service quality on customer loyalty in grocery food retailing in
the UK: A case study of ASDA)

Contents
INTRODUCTION...........................................................................................................................3
Overview of the research........................................................................................................3
Background of the organisation..............................................................................................3
Rationale for the research.......................................................................................................3
Significance of the research....................................................................................................3
Problem statement..................................................................................................................3
Research aim..........................................................................................................................3
Research Objectives...............................................................................................................3
Research questions.................................................................................................................3
LITERATURE REVIEW................................................................................................................3
RESEARCH METHODS................................................................................................................3
RESULTS........................................................................................................................................3
DISCUSSION..................................................................................................................................3
CONCLUSION and RECOMMENDATIONS...............................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Overview of the research
Service quality and customer loyalty both are significant factors for an organizational
development goals and also for the development of organizational behaviour. Customer loyalty
can be achieved in matters such as service quality, sales knowledge and customer dealing
effectively. The quality of service is critical to the survival as well as profitability of an
organization as in the present time customer looking for quality more instead of price they paid.
Retailing business plays vital role in providing high customer experience to customers and gain
profitability (Diallo and Seck, 2018). It is important for organization nowadays to provide
quality service to its customers in order to retain and engage them for longer time period.
Customer loyalty is sometimes seen in context of dealing with customer complaints and
problems. Most of the companies make use of customer retention and loyalty strategies in order
to retain at marketplace and attain competitive advantage as well. There is positive impact of
good service quality on the customer loyalty and vice versa. Apart from this, organizations
ensure that their customers is being provided with high quality products as well as services as it
leads to repeat purchase and increasing performance of a company. The main objective of this
study is to identify the impact of service quality on customer loyalty within grocery food
retailing in UK. The present study is categorized into different sections as the first sections
introduces the research aim, objectives, significance and background as well. In the second
section, a literature review pertaining to research questions is discussed. In the third section, the
research method used by researchers along with their justification is elaborated. In the last, some
of the recommendations will be provided to the higher authorities of company for providing high
quality of service and increased number of loyal customers towards organization.
Background of the organisation
For the present study, Asda is taken into consideration as a base company. It is a British
supermarket chain that is headquartered in England, United Kingdom. The company was
established in year 1949 and at present it provide products and services in more than 632
locations globally. The company offer products and services such as grocery, general
merchandise, financial services and so on. Asda has more than 1,65,000 talented and skilled
staff members which is one of the reason of its success and growth at marketplace. The

Company is facing issue for imposing themselves while due to having stronger position and
monopoly in market service to loyal customer. Along with this, the higher authorities of Asda is
also facing issue as there is decline in number of loyal customers. For this, the study is conducted
that identifies relationship among service quality and customer loyalty within organization.
Rationale for the research
One of the main reasons to conduct the study is to identify the impact of service quality on
customer loyalty in grocery food retailing in UK. In addition to this, it help in gaining insight
about the various attributes of customer loyalty and how organizations focus on providing high
quality experience to customers in order to retain and gain success at marketplace. Apart from
this, it help researcher in both personal and professional context. With reference to professional,
it help in gaining insight about retail industries and the strategies adopted by them for providing
quality service in UK. In context to personal, it help in improving as well as learning skills such
as time management, data analysis, problem solving, data collections and many more.
Furthermore, it also help investigator to conduct future studies systematically and properly and
also to grab opportunities in an appropriate manner.
Significance of the research
The main purpose of this study is to identify the relationship among service quality and
customer loyalty within the retail industry by which companies can easily come to know about
how to provide high quality to customers and retain them for longer time period. In addition to
this, investigation has been conducted because the company is required to pay attention towards
its loyal customers and to provide quality of service which is one of the important factor in order
to attain competitive advantage and fight with rivals prevailing at marketplace. The present study
also states about the influence of service quality on customer loyalty which make them aware
about the changes that are to be made in order to increase number of loyal customers. The report
will also help in gaining insight about key attributes of customer loyalty and also providing
recommendations to company for improving its service quality which leads to increase in
profitability and productivity of respective organisation.
Problem statement
The problem which is identified that respective organization is facing issue for imposing
themselves because of having high monopoly at market and stronger positions over their cheap

services to loyal customers. Along with this, it is identified that in the present time customer are
more focused towards quality service instead of quantity and price. For this reason, the study is
conducted as it help in analyzing the impact of service quality on customer loyalty within the
retailing industry in UK.
Research aim
To investigate the relationship between service quality and customer loyalty in the
context of grocery food retailing in the UK
Research Objectives
 To understand the key attributes of customer loyalty
 To assess the impact of service quality on customer loyalty
 To make appropriate recommendation to enhance customer loyalty
Research questions
 How service quality directly influences customer loyalty?
 What are the key factors associated with customer loyalty?
 What are the main attributes of service quality and its consequences?
LITERATURE REVIEW
In this section, the concept that will discuss within the literature is customer loyalty,
attributes of customer loyalty, service quality. In addition to this, there is a discussion about
impact of service quality on customer loyalty and the main attributes of service quality along
with its consequences.
Customer loyalty is defined as a measure of customer likeliness to do repeat purchase with a
brand or organization. In addition to this, it is basically the result of customer satisfaction, value
of good and services and a positive customer experience attained by customer from a business. It
is an ongoing positive relationship among a brand and customer that drives existing customers to
remain long term and choose organization over its competitors offering similar benefits. If an
organization consistently meet customer expectation then it will be able to develop customer
loyalty which is important in order to maintain performance and retain at marketplace for longer
time period.
Service quality is basically a comparison of perceived expectation of a service with the
perceived performance. In addition to this, it is basically viewed as the output of delivery system
that is linked to the customer satisfaction. It is stated that service quality measures how well a

service is delivered as compared to customer expectations. Every customer has some
expectations of service they want to receive while buying a product or service. It is important for
an organization to provide an effective customer service quality to its customers as it leads to
customer satisfaction and retention. There basically five dimensions on which service quality is
based that is reliability and responsiveness, tangibles, responsiveness, empathy, assurance and so
on. Focusing on all these dimensions allow organization to gain higher growth and success at
marketplace.
There is direct relationship between service quality and customer loyalty. Customer
loyalty is one of the significant objective for strategic marketing planning that shows an
important basis for increasing competitive advantage at marketplace. The customer loyalty
directly leads to raise in business value and keep the business cost low as well. It is analyzed that
raising the value means companies are able to seek new customers in an effective manner.
Service quality is one of the vital factor which plays an important role within the customer
loyalty. If an organization is provide high service quality to its customers then they will surely
remain competitive for longer time period. In the present time, most of the organization are
focused on providing on time delivery along with high quality to its customers as it help in
developing positive mindset of customers towards the brand which leads to repeat purchase in
future and increase in profitability of an organization. service quality leads to satisfaction which
is positively associated to repurchase intention as well as customer loyalty. It is important for a
company to focus on fulfilling the expectations of customers and provide them high experience
that results into future purchase intention in an effective manner. The service manager requires to
understand how perceptions of their performance on service quality dimensions impact on the
level of customer satisfaction. All this will help respective organization to retain customer for
longer time, increase number of loyal customers, increase productivity, maintain sales and
profitability level, develop brand image, attain competitive advantage over its rivals and many
more. It is determined that achievement of fulfilling customer expectations will directly leads to
growth and success of a company positively and effectively.
In the previous research, there is a discussion about concepts of customer loyalty along
with its attributes in an effective manner. In addition to this, the concept of service quality is also
mentioned properly but there is no data about impact of service quality on customer loyalty.
Along with this, the previous studies did not involve the attributes of service quality with its

consequences on an organization. This is one of the main research gap of the present study. By
conducting this study, investigator will be able to identify the relationship among service quality
and customer loyalty in context to food retailing within the United Kingdom. Apart from this, the
present investigation will allow researcher to provide recommendation to respective organization
for enhancing customer loyalty which leads to increase in performance and profitability of an
organization Which in turn help company to retain and marketplace for longer time period. It is
identified that respective organization facing issue because of monopoly and stronger position
over the cheap services to loyal customers. This study help in analyzing the influence of service
quality on customer loyalty in an effective manner.
Literature review is one of the important part of the investigation that focus towards
evaluating and collecting the data which is already available in order to extract out meaningful
information. Along with this, literature review assist in gathering of secondary information in a
proper and systematic manner. There are different sources that will be significant and useful for
investigator and gaining second information about the relationship among service quality and
customer loyalty within an organization. One of the main purpose of literature review is to
identify research gap from the previous stories. By collecting the viewpoint of different authors,
researcher will be able to gain better understanding about the topic due to which valid and
reliable conclusion can be drawn. Literature review assist researcher in determining the further
pathways to be followed for a primary investigation by undertaking the evidence of secondary
study. In the previous studies, the data were available about customer loyalty and the concept of
service quality. Along with this, the formation is available about importance of service quality as
well but there is insufficient information about the relationship among service quality and
customer loyalty. This is the main gap and to overcome with this gap, researcher will require to
follow the research questions. Moreover, this will support in attainment of research aim and
objectives and also aid in fulfillment of missing data gap. The research question of present
dissertation is mentioned below:
2.1 The key attributes of customer loyalty
Problems in the specific area: With the emerging trends the overall preferences of
customers have changed because they possess zero switching cost. They are able to easily switch
between different brands that lead to difficulty for organisations to maintain a specified long-run

permanent customer base. The overall brand value of a particular organisation is depicted
because of the satisfaction level achieved by a particular customer base with time.
Brief history of the problem: The major problem with many existing retail sector brand is
related with a high amount of competition that is arising because of fast changing external macro
environment.
Ask some questions in order to orient the reader: The main associated question with this is
“how the service quality directly influences customer loyalty?”
Analyze previous studies:
As per view points of Mike townsend (2019), Customer loyalty is associated with what
the organisation is willing to offer the customers on a regular basis. This concept is connected
with creating a loyal customer base that is associated with overall customer experience process.
As per this study there are some critical aspects of customer loyalty that are related with
customers having a regular visit to a particular brand of organisation. They are not willing to
look for any other competitor in the long run. They are always open for recommendations with
respect to the products and services that are offered by the brand. They are also offering timely
feedback to the organisation on the way the products or services can be improved. In this respect
customers trust the brand and they remain loyal even if there is some of the dissatisfaction with
respect to the product or service. The customer experience process is related to engage in the
present customer base and building long term association with them. Customer loyalty is a
willingness of a customer to desire a product repeatedly from a specific brand because of the
outstanding or satisfactory experiences. Customer loyalty is the relationship that takes place with
a satisfied customer base from a business establishment that can also extend to occasional
repeated customers (The 7 Characteristics That Define a Loyal Customer, 2020).
-Outline previous studies’ conclusions:
The main conclusion from this study has been that customer loyalty is a measure of the
way how likely customers are repeatedly spending their financial resources on the products or
services. From this study it is concluded that the loyalty of a customer depends on four factors. It
includes dependability the customers are learning to depend on the particular brand. Another
element is emotional connection when organisation forms a meaningful bond with the
customer. Third element is superior to that is the brand amounts treat a superior quality over

other competitors. Last is social media presence because of the strong social media presence
there is a very crucial impact on building a loyal customer base in the changing times.
-Discuss their findings and conclusions:
The major findings from this study were the benefit of customer loyalty towards a
particular brand. It helped organisations towards spreading the indirect positive marketing of the
brand. Apart from this it is also associated with loyal customers acting as the Focus group. Many
times for organisations that are willing to implement a loyalty reward program referral program
for strengthening the customer services presence of an effective loyal customer base plays a very
important role in spreading the overall positivity with respect to the brand.
Link between previous studies and yours
The overall link between the previous studies and the current Research report is that both
the reports are based on analysing the issue of customer loyalty and its impact on brand
functioning.
The present research report is going to analyse the key attributes associated with customer
loyalty in long turn. There is always a direct relationship between the service quality level and
the achievement of customer loyalty. Present research is going to examine and help organisations
in understanding this relationship with various other elements. As per the previous studies
customer loyalty is gradually building up by the trust that customers are able to build up
eventually with the time when they are using the products and services of a specified
organisation. But in case of present research report the quality aspect is majorly focused by the
researcher in order to analyse the issue of building a loyal customer base. The different attributes
associated with service quality level will only be focused and analysed to understand its effect on
the customer loyalty. So present the search report will assist and help future research work in
understanding the quality as a focal point of interest for many customers.
2.2 The impact of service quality on customer loyalty
2.3 The main attributes of service quality and its consequences
Chapter 3- RESEARCH METHODS
The aim of the present study is to investigate the relationship between service quality and
customer loyalty in the context of grocery food retailing in the UK

Research Objectives
 To understand the key attributes of customer loyalty
 To assess the impact of service quality on customer loyalty
 To make appropriate recommendation to enhance customer loyalty
3.1 Research design
it is defined as the framework of research techniques and methods selected by researcher. In
addition to this, it allow investigator in analyzing research method which are suitable for the
subject matter. It is important for researcher to analyze the method used in this study. The type of
research design is mainly include purpose statement, data collection methods, research analysis
methods and so on. There different type of research design that is experimental, qualitative,
quantitative, descriptive, explanatory, exploratory and so on. For the present study, descriptive
research design is being used by researcher as the investigation is based on primary research. In
addition to this, it help researcher in identifying along with classifying the different factors.
Herein, the investigator emphasize on describing the situation they are studying. It is determined
that descriptive research design is a theory based design that researcher use to analyze, collect
and present their collected information. One of the main reasons to select descriptive research
design is it allow investigator to give insight into the how and why of a study. Moreover, it
enable others to understand the significance of research along with the clear problem statement
associated to investigation.
Research approach
It is defined as an important tool in methodology section that allow researcher in analyzing as
well as evaluating collected data in an effective manner and then convert it into meaningful
information. In addition to this, the approach is mainly used within research are based on the
form of method adopt for performing the investigation. It is basically the process which will be
following in investigation. There are mainly two types of research approaches that is deductive
and inductive approach. The approaches is given below:
 Inductive approach: Herein, the qualitative information is mainly reviewed as well as
analyzed for gaining in-depth pattern of information that further help in formation of
theory for better understanding. In addition to this, inductive approaches mainly suitable
for qualitative investigation and support in development of new theory that is a related
with collected data.

 Deductive approach: it is analyzed that this approach is mainly belong to the specific
research where the existing theory is evaluated by formation of research question or
hypothesis for presenting with the relevant data. In addition to this, it is considered to be
more helpful in analyzing Collected information and therefore is suitable for quantitative
type of research.
For the present investigation, deductive approach has been used within this study as it help
in analyzing the quantified figures and facts that support in presenting data with more accuracy
and reliability. In addition to this, it also help researcher to gain more knowledge which could be
based on different phenomena and some logical conclusions. Furthermore, it is analyzed that
respective research approach assist in providing better explanation of casual relationship between
variables and concepts. On the other hand, inductive approach is not selecting for this study as it
is based on qualitative information and sometimes did not give valid and reliable results.
RESULTS
DISCUSSION
CONCLUSION and RECOMMENDATIONS

REFERENCES
Books & Journal
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in emerging countries: Effects of brand cues and the cultural context. Journal of
Business Research, 86, pp.311-320.
Huang, P.L., Lee, B.C. and Chen, C.C., 2019. The influence of service quality on customer
satisfaction and loyalty in B2B technology service industry. Total Quality Management
& Business Excellence, 30(13-14), pp.1449-1465.
Khan, M.A., Zubair, S.S. and Malik, M., 2019. An assessment of e-service quality, e-satisfaction
and e-loyalty. South Asian Journal of Business Studies.
Lee, C.H., Zhao, X. and Lee, Y.C., 2019. Service quality driven approach for innovative retail
service system design and evaluation: A case study. Computers & Industrial
Engineering, 135, pp.275-285.
Zhang and et. al., 2019. Service quality measurement for omni-channel retail: scale development
and validation. Total Quality Management & Business Excellence, 30(sup1), pp.S210-
S226.
Online:
The 7 Characteristics That Define a Loyal Customer, 2020 [online], Available through<
https://www.moderntiredealer.com/articles/15908-the-7-characteristics-that-define-a-
loyal-customer>
Importance of Brand Personality To Customer Loyalty: A Conceptual Study, 2020 [online],
Available through< https://core.ac.uk/download/pdf/234652278.pdf>
Your Best Asset: What Makes Customer Loyalty So Important?, 2020 [online], Available
through< https://www.business.com/articles/what-makes-customer-loyalty-so-
important/>