Final Thesis

Antecedents of customer loyalty at Kong Fui
supermarket on Aruba
by
Bsc. Rignald J. F. Martis
A thesis submitted in partial
fulfillment of the requirements for
the degree of
Master in Business
Administration
University of Groningen
2006
Approved by ________________________________________________________
Chairperson of Supervisory Committee
Mrs. Dr. J.A. Voerman
and
_______________________________________________________
Assistant Supervisor
Ms. Drs. S.T. M. Kremer
Program Authorized
to Offer Degree______________________________________________________
Date _______________________________________________________________
UNIVERSITY OF GRONINGEN
(RIJKSUNIVERSITEIT GRONINGEN)
ABSTRACT
Antecedents of customer loyalty at Kong Fui supermarket on Aruba
by Bsc. Rignald J. F. Martis
Chairperson of the Supervisory Committee: Mrs. Dr. J.A. Voerman
Marketing Department
A thesis presented on the antecedents of customer loyalty at Kong Fui
Supermarket on Aruba, D.C.
In grocery retailing, consumers have a great variety of supermarkets to
patronize. This brings forth an important issue as to what can be done by
supermarket managements to let their customers feel at home so they can come
back. In this regard, customer satisfaction, acculturation preference, shopper
characteristics, shopping motivations, customer characteristics and loyalty
program adoption have been assessed as the predictors of loyal behavior and
attitude of customers. Furthermore, the effects of idiosyncrasy, privacy
concerns, customer characteristics, loyalty program design and enjoyment on
loyalty program adoption have been studied.
The potential effects were assessed through techniques to measure both linear
and non-linear dependencies. Finally, the results provide mixed support for the
impact of the studied antecedents on both customer loyalty and loyalty program
adoption respectively.
Keywords: Customer loyalty; Customer satisfaction; Loyalty program
i
Master in Business Administration
Marketing Management
i
TABLE OF CONTENTS
Number Page
Table of Contents ____________________________________________ i
List of figures _______________________________________________iii
Acknowledgments ___________________________________________iv
Summary___________________________________________________ v
Chapter 1 Introduction __________________________________ - 1 -
1.1 Background of the study___________________________________ - 1 -
1.2 Kong Fui Supermarket & Wholesale ________________________ - 4 -
1.3 Problem statement and research questions __________________ - 6 -
1.4 Methodology and limitations _______________________________ - 7 -
1.5 Report structure __________________________________________ - 7 -
Chapter 2 Literature review _____________________________ - 8 -
2.1 State of the art of customer loyalty__________________________ - 8 -
2.2 Factors affecting loyalty __________________________________ - 10 -
2.3 Antecedents and moderating factors of customer loyalty for food
retailers____________________________________________________ - 13 -
2.4 Factors affecting loyalty program adoption _________________ - 17 -
2.4 Antecedents and moderating factors of loyalty program adoption for
food retailers _______________________________________________ - 19 -
2.5 Conceptual model ________________________________________ - 22 -
Chapter 3: Research methodology ________________________ - 24 -
3.1 Introduction_____________________________________________ - 24 -
3.1.1 Operationalization of model ___________________________________- 24 -
3.1.2 Questionnaire _______________________________________________- 28 -
3.2 Sample and data collection________________________________ - 28 -
3.3 Analytical method _______________________________________ - 29 -
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Chapter 4: Research results ___________________________ - 38 -
4.1 Representativity of sample________________________________ - 38 -
4.2 General findings _________________________________________ - 39 -
4.2.1 Basic descriptive statistics for customer loyalty predictors _______- 39 -
4.2.2 Basic descriptive statistics of loyalty program adoption predictors - 53 -
4.2.3 Reduction of multi-item measures _____________________________- 54 -
4.3 Non-linear influence of antecedents________________________ - 57 -
4.3.1 Influence of the binary customer characteristics ________________- 57 -
4.3.2 Influence of non-customer characteristics ______________________- 59 -
4.3.3 Influence of the customer characteristics with manifold categories - 60 -
4.4 Linear influence of the antecedents of both layers ___________ - 65 -
4.4.1 Influence on word-of-mouth ___________________________________- 65 -
4.4.2 Influence on attitudinal loyalty________________________________- 66 -
4.4.3 Influence on repeat purchases_________________________________- 67 -
4.4.4 Influence on loyalty program adoption _________________________- 68 -
4.5 Further analysis of the influences _________________________ - 70 -
Chapter 5: Conclusions and implications __________________ - 74 -
5.1 Conclusions and discussion _______________________________ - 74 -
5.2 Implications and evaluation_______________________________ - 76 -
5.2.1 Implications for further research and evaluation________________- 76 -
5.2.2 Managerial implications ______________________________________- 79 -
Bibliography_________________________________________________ i
iii
iii
LIST OF FIGURES
Number Page
Figure 2.1: The four-stage loyalty model __________________________________ - 9 -
Figure 2.2: Conceptual model ___________________________________________- 22 -
Figure 3.1: Overview of studied influence of customer characteristics _______- 31 -
Table 4.1: Sample proportions based on age category ______________________- 38 -
Table 4.2: Sample proportions based on gender ___________________________- 38 -
Table 4.3: Sample proportions based on number of household members _____- 39 -
Table 4.4: Descriptive statistics of shopper characteristics items____________- 40 -
Table 4.5: Descriptive statistics related to the shopping motivation items ___- 42 -
Table 4.6: Descriptive statistics of the 5-point scale customer satisfaction measure
______________________________________________________________________- 43 -
Table 4.7: Descriptive statistics of the 10-scale customer satisfaction items __- 43 -
Table 4.8: Descriptive statistics of the measured customer satisfaction aspects - 46
-
Table 4.9: Descriptive statistics of focal and competitors loyalty programs
adoption ______________________________________________________________- 47 -
Table 4.10: Descriptive statistics of the customer characteristics items _____- 49 -
Table 4.11: Descriptive results of acculturation preference items ___________- 50 -
Table 4.12: Descriptive results of attitude and WoM items _______________- 51 -
Table 4.13: Descriptive results of repeat purchase behavior items __________- 52 -
Table 4.14: Descriptive results of enjoyment items & idiosyncratic fit measure - 53
-
Table 4.15: Descriptive results of design items & privacy measure __________- 54 -
Table 4.16: Overview of factor analysis and reliability analysis for customer
satisfaction____________________________________________________________- 55 -
Table 4.17: Chi-square test results; influence binary (gender) items on loyalty
program adoption______________________________________________________- 57 -
Table 4.18: Mann-Whitney U test results for behavioral loyalty ____________- 58 -
Table 4.19: Student t- test results for head of HH _________________________- 59 -
Table 4.20: Chi-square test results; influence marital status & gross income on
card ownership ________________________________________________________- 61 -
Table 4.21: Summary of Kruskal-Wallis tests results _____________________- 62 -
Table 4.22: Results from different analyses of variance ____________________- 64 -
Table 4.23: Summary of stepwise multiple linear regression analysis for WoM and
attitude _______________________________________________________________- 66 -
Table 4.24: Summary of stepwise logistic multiple regression analysis for
variables predicting repeat purchase behavior ____________________________- 68 -
Table 4.25: Summary of stepwise logistic multiple regression analysis for card
adoption ______________________________________________________________- 69 -
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ACKNOWLEDGMENTS
This report is the result of a research project performed to complete my
Marketing Management study at the faculty of Economics at the
University of Groningen (RuG). Therefore, at this point, I would like to
acknowledge the persons who have contributed in one way or the other in
making it a success.
Thereby, I want to thank the Almighty God for the perseverance and
strength given in writing this thesis. Furthermore, wishes of sincere
appreciation to my supervisor Dr. J.A. Voerman for her assistance in the
preparation of this manuscript by providing useful comments on the
submitted drafts. Undoubtedly, the realization of this final product would
have been impossible without her inputs.
Additionally, special thanks to my father, mother, and my sister for their
moral support and help. My cousins C. J. Henriquez, A. G. Tromp and A.
L. Tromp, my aunts E. M. Tromp and M. A. Krozendijk-Tromp and my
lovely mom many thanks for your cooperation in the data collection
process.
Furthermore, I am very thankful to Mr. Errol Henriquez (Kong Fui
supermarket) and Ms. M. Vigelandzoon (CBS Aruba) for her great
support and patience during these last months of research.
Additionally, I would like to use this opportunity to thank both Mrs. P.
Paula-Croes and Mr. R. Sharp for their great work and dedication
regarding the translation and back-translation of the questionnaire. I
would also like to use this opportunity to thank all the customers of Kong
Fui supermarket who have filled in the questionnaire on which this
investigation is based. Last but not least, I am very thankful to all the
other persons who in one way or the other were there with their support
and words giving me extra strength to march on with this research
project.
From the bottom of my heart, thanks, you really deserve it!
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SUMMARY
Retailing is an always interesting field, since we get in touch with it in our
daily lives. However, the existence of too many retailers in todays
marketplace makes the playing field of grocery retailers in general ever
more competitive. Consequently, this high level of competition makes it
necessary for managers to look for ways to encourage relationship
building with customers. This may look like an easy task, but without
knowing what is valued by ones customers and what their preferences
are, nothing can be done to satisfy them and try to bind them to ones
store.
It was this lack of knowledge about customer wishes of the management
combined with the churn of customers at Kong Fui Supermarket on Aruba
that lead to the following management question:
What can be done to increase the purchases of their current customers?
In order to answer this question it was chosen to search for predictors of
repeat purchase behavior. Thereby, existing literature shows that repeat
purchase behavior is a measure of customer loyalty. However, several
writings suggest that customer loyalty has two dimensions and (i.e.
Reinartz and Kumar (2002) point out that it would be useful to
complement purely purchase behavior measures of customer loyalty with
attitudinal measures. Therefore, and in order to get a broader view as to
the antecedents of customer loyalty in general the following closely related
research question was formulated:
Which are the shopping motivators affecting customer loyalty?
An extensive literature review was done, which provided most of the
constructs to be studied under the population. This review also showed
that customer satisfaction and loyalty card adoption are quite significant
predictors of customer loyalty. Consequently, the conceptual model was
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constructed with a double layer. In this the predictors for the adoption of
loyalty cards was also assessed. Furthermore, the aspects presumed to
affect customer loyalty were also added to the questionnaire.
With the help of a survey under the customers of Kong Fui it was tried to
come up with answers to the hypotheses which were broadly based on
prior research. Consequently, the ultimate goal of the survey was to
provide an answer to the research question.
In this regard, the findings showed support for the existence of an effect of
customer satisfaction, card ownership, shopping motivation, shopper
characteristics, acculturation preference and customer characteristics on
customer loyalty. However, it should be noted that not all these predictors
of customer loyalty have the same type of effect on customer loyalty; some
have linear influences, whereas others have non-linear relationships
towards customer loyalty. Furthermore, some appear to have independent
effects on customer loyalty, whereas others seem to have significant
effects only when assessed communally. It is also remarkable that the
effects differ per measure and/or dimension of customer loyalty.
On the contrary, regarding the antecedents of loyalty program adoption,
the evidences were not sufficient as to support the existence of significant
effects of loyalty program design and privacy concern on the adoption of
these programs. Additionally, not each of the measures of customer
characteristics appeared to be significantly influential. However, loyalty
program enjoyment seems to have the highest ability of predicting the
adoption of loyalty programs as compared to idiosyncrasy.
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CHAPTER 1 INTRODUCTION
1 . 1 B a c k g r o u n d o f t h e s t u d y
Retail patronage issues have engaged academic minds ever since the dawn of marketing as
a scientific discipline (Bhatnagar and Ratchford 2004). Every day we get in touch with
retailing. Retailing is the set of business activities that adds value to the products and
services sold to consumers for their personal or family use (Levy and Weitz, 2004). Another
possible definition for retailing is the following: Retailing consists of those business
activities involved in the sales of goods and services to consumers for their personal, family
or household use. It is the final stage in the distribution process Berman and Evans (1992:
3). Therefore, whether doing our daily grocery purchases, buying plane tickets or such
diverse transactions, we are dealing with the retail world. Retailing is such a part of our
everyday lives that it is often taken for granted (Levy and Weitz, 2004).
There are too many retailers in todays marketplace. Since the playing field of grocery
retailers in general is becoming ever more competitive, it is necessary to look for ways to
encourage relationship building with customers. It is necessary to build, evaluate and
retain the loyalty of customers (Sawmong and Omar, 2004). By building relationships with
customers it is presumed that retailers could enhance the likelihood of customer
repurchase, maximize the value of future purchases of these customers and even reduce
customer churn rates (Rust, Lemon and Narayandas, 2005). Furthermore, customer
loyalty can result in the following advantages, namely more natural interactions,
complaints being expressed earlier, more knowledge of customer wishes, referrals, lower
price sensitivity, and larger profits and last but not least customer loyalty represents value
(Reichheld 2003; Reinartz and Kumar 2002). However, it is not that simple to build lasting
relationships with customers. Still, due to the various advantages brought by loyal
customers it should be tried to build these relationships. In this regard, Duffy (1998) lists
after an extensive literature review various economic- and competitive advantages that
are brought by loyal customers, including
1
:

1
Note that Duffy (1998) comprised a longer list, however these extra advantages were at the brand level and
this study focuses on the retail store level
- Greater sales: loyal customer buy more; they increase sales by purchasing a
wider variety of products, making more frequent purchases and buying more
expensive goods;
- Higher prices: due to their lesser price sensitivity loyal customers provide the
ability to set premium prices;
- Word-of-mouth: loyal customers provide the best available advertising a
company can get by spreading word-of-mouth;
- Entry barrier: the existence of a loyal customer base is seen as a substantial
entry barrier to competitors;
- Energy devotion: a loyal customer base allows a company to devote its energy to
other matters like quality improvement;
- Sensitivity to marketing efforts: marketing efforts of competitors like marketing
communication or a decrease in price are less likely to influence loyal customers.
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For the purpose of this study, the category of food retailing stores was chosen. Since this
study deals with a supermarket, the definition of supermarkets as used in this study
follows. McClelland (1962) cited the trade journal Self Service and Supermarket for the
following definition of supermarkets stores of not less than 2,000 sq. ft. sales area, with
three or more checkouts and operated mainly on self-service, whose range of merchandise
comprises all food groups, including fresh meat and fresh fruit and vegetables, plus basic
household requisites (i.e. soaps and cleaning materials). It should be mentioned that this
definition was adopted from secondary sources and is generally accepted in Britain.
However, there appear to be three sorts of difficulties when defining supermarkets,
namely those relating to the minimum size requirements, to the characteristics and extent
of self-service, and to the stock assortment (McClelland, 1962).
This paper focuses on the food retailing industry on Aruba. Aruba is an island in the
Caribbean where almost no products are produced domestically. On the island almost
every product category lacks a domestic product. In this regard, the study could be related
to the study of Nijssen and Douglas (2004), who studied the impact of the availability of
both domestic and foreign brands, on consumers attitudes towards the purchase of foreign
products in a country with a high level of foreign trade. That research was performed in
the Netherlands, where quite a few product categories are well represented by domestic
products.
Furthermore, according to Jamal et al (2006) there is a paucity of research examining
shopper profiling in non-Western contexts. They referred to literature stating that the
need for such a research is highlighted through the fact that the aggressive, geographic
market expansion of successful retail organizations, the internationalization of retail
practices and the development of a global consumer market has led many to call for
investigating consumer behaviors in specific cultural contexts. However, there appeared to
be another stream of authors arguing that the management of retail firms in other
cultures requires an understanding of, and responding to, the local consumers motives,
value, lifestyles, perceptions, attitudes and needs.
Food retailing on Aruba
Food retailers on Aruba can be grouped into three types of outlets; large supermarkets,
mini-markets, and small shops. On the island, the large or chain supermarkets are used to
have stores with areas over 30,000 sq. ft., selling both food and non-food items
2
. The layout
of these stores are similar to US supermarkets, with separate deli, bakery, meat, frozen,
seafood and produce sections, as well as scanners and electronic inventory control systems.
These supermarkets have well over three registers- as stipulated in the definition to be
classified as supermarket- and over 10 aisles, ample parking space and a trained
management staff. Competition among supermarkets is fierce with promotion and
advertisement playing a key role in marketing strategies. However, an interview with the
general manager of Kong Fui revealed that the focus in this battle field for customer
purchases is on price, assortment and cleanliness of the store.
Although the company has adopted a loyalty program, the company has recently seen a
drop in its visitors and customers purchases. This fact can be counter balanced either by
focusing on the current customers or by looking for ways to attract new customers and/or
bring back the ones who have crunched. However, it is widely known that it is much more

2
Source: Export Guide to the Consumer Food Market, September 1997; prepared for the U.S. Department of
Agriculture by Fintrac Inc.
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expensive to attract customers than to keep the existing ones (e.g. Liebermann 1999). The
costs of attracting new customers may even be as big as five times that incurred for
retaining an old customer (e.g. Reichheld, 2003). Therefore, this investigation will focus on
a strategy whereby the company focuses on the existing customers. By focusing on these
customers the company should look for ways to enhance the spending of these customers.
This research tries to give them an insight into what could be possible actions to
undertake to make that possible.
According to Sharp and Sharp (1997) the usage of loyalty programs is a defensive strategy,
because they aim to keep the current customers in the face of future competitive offers,
rather than to gain market share. For that reason, it is assumed that a better fit of the
loyalty program design and customers preferences concerning loyalty programs could
enhance this defense. Furthermore, due to the existence of multi-store loyalty in grocery
retailing both on the island and in general, reacting on competitors loyalty programs is
presumed to be helpful. This is extremely important, since the provision of loyalty
incentives and rewards through loyalty programs of competitors may loose the competitive
advantage of a company. This would not be an exception on Aruba.
Contribution of this study
This study contributes to the literature by investigating the determinants of customer
loyalty in a grocery context for a small economy, namely Aruba. Thereby, it investigates
the effects of customer satisfaction, loyalty card ownership, acculturation preference,
shopper characteristics, shopping motivation and some consumer characteristics including
some moderating factors on loyalty in the retail food market on Aruba. These effects are
particularly studied for Kong Fui and both card-holders and non-card-holders are
surveyed.
Furthermore, according to Jamal et al. (2006) food and grocery shopping is an effective
context to study consumers and their shopping motivations, values and decision making
styles for a number of reasons. After an extensive literature review Jamal et al. (2006) list
the following reasons:
Each of these three motivations is expected to hold in this situation as well, however, it
will be left to the results of this study to prove it. Before continuing, some information
about the focal company in this research will be presented in the following section.
- The ability to contrast their findings against previous research, due to the
existence of previous research that examined shopping motivations in a
grocery context;
- grocery shopping is an ongoing and essential activity whereby consumer
decision-making within the grocery environment can be highly involving; and
- while grocery shopping in a Western context is often perceived as task
oriented, routine, and non-recreational in nature, their preliminary
discussions with some of the local shoppers revealed that the grocery shopping
in the local context (where supermarkets and shopping malls are a recent
phenomenon) was associated with a number of hedonic feelings
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1 . 2 K o n g F u i S u p e r m a r k e t & W h o l e s a l e
This study investigates particularly consumers of Kong Fui Supermarket & Wholesale on
Aruba (hereafter abbreviated to Kong Fui). Kong Fui is a supermarket with its core
business being the sales of both food and non-food merchandise. The company is a wholly
owned organization of a Chinese businessman, as most of the supermarkets on Aruba. The
company has been operating on the Aruban market since 1992. During those years of its
existence the company has coped with stable growth in both sales and customers visiting
the supermarket. During the years it has been transformed from a mainly food retailer
into a supermarket selling both food and non-food items. It currently has a department for
ready-to-eat food take-away, a cosmetics department, and a department with fresh meat,
another with fresh fruits, a department with household products and the department of
canned food.
The company operates both as a retailer and as a wholesaler. According to the general
manager the margins on retail sales on Aruba are far lower than those in big countries. In
an effort to balance these small margins they started directly importing some of the
products they sell. By importing themselves they can buy the products against lower prices
which would ultimately translate into higher margins. He continued pointing out that to
do this you would need wholesale operations as well. The implementation of wholesale
operations would increase the logistical speed and bring continuity in the arrival of
imported goods. Besides that, they can buy in on larger scales, which they sell to other
smaller players on the market on Aruba.
Membership card of Kong Fui
The membership card of Kong Fui supermarket is for both clients of the supermarkets as
well as wholesale members. The clients of the supermarket become class-A members after
completing the registration, while the wholesale members are categorized as class-B
members. In order to sign up for the membership card, which is free of charge, one should
provide ones ID number, address, home telephone number and those types of general
information.
The program functions as follows: each month the purchases of each member will be
aggregated and after reaching the amount of a particular amount in Aruban guilders in
purchases for that month, the corresponding member will start getting 2% discount on
each purchase during that month. This purchase amount aggregation method starts back
at the beginning of every month. At the end of the year, the total purchases for that year
are calculated and the member will get baskets with a particular value of merchandise
based on its yearly purchases. Thus, in short this program awards points for purchases
that entitle to additional discounts when reaching a certain level.
There are eight grocery retailers making use of loyalty programs on Aruba. Out of these
eight programs five have been running for a merely three to four years. Certified Super
Center, with the longest running program, gives its members gifts at the end of the year.
This gift is in proportion of the purchase of these members during the year. The second
longest running program of the three is the one of Kong Fui. The functionality of this
program has already been covered in the preceding paragraphs. Finally, there is the
youngest loyalty program of the three; the one of PriceSmart. In order to participate in this
program customers are required to pay a registration/annual membership fee. As reward
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for their membership, members of this program get discounts on the prices of the whole
assortment of the retailer. The other five programs can be described briefly as follows:
In this regard, it is assumed that especially PriceSmarts program is especially attractive
to households with large purchase volumes. Consequently, it would be important for Kong
Fui to react on this program to prevent further customer defection; thereby playing
defense. In this it should not be forgotten that it is easier and less costly to keep customers
than to get them back or even attract new ones.
Having and, more importantly, retaining loyal customers is extremely important for the
continuity and growth of any company and Kong Fui is no exception. Satisfying their loyal
customers has a twofold importance. Besides providing Kong Fui with the advantages
listed above, satisfying loyal shoppers is extremely important in the market in which Kong
Fui operates. It is a fact that Aruba is an island of no more than 69.5 square miles. On this
small area, there are over 250 food retailers offering a general assortment to the roughly
100,000 inhabitant of the island (in 2004 there were 98,829 inhabitants on the island
3
). All
these food retailers and other retailers offering food- and/or non-food items are competing
to get a share of the purchases made by these 100,000 inhabitants. Thus, it is an intensive
competition. This fierce competition is intensified by the ever growing number of players in
the market. Just in the first four months of 2006 there were six entrants to the market of
food retailing offering a general assortment, which registered at the Chamber of
Commerce on Aruba
4
. In this regard, the distance from home to the food retailer is
becoming continuously less; putting more stress on the size of the supermarkets selling
area. Therefore, having a loyal customer base would be a very valuable asset for Kong Fui.

3
Source: www.arubaeconomicaffairs.aw
4
Source: www.arubachamber.com
- Hong Kong supermarket: There are no registration fees and no discounts on
purchases or merchandise, but the customers get gifts at the end of the year.
- Super Food: The membership registration is free and each week there is a
new set of merchandise available with discounts on them. Customers are
eligible to get gift certificates of AFL. 25, 50, 75 or 100 and at years end they
can get one of these gift certificates or a basket with merchandise depending
on the points they have accumulated during the year.
- Kong Hing Super Center: The membership registration is free of charge. At
years end customers are eligible to get a gift certificate as a present.
- Morning Supermarket: Also has a free membership fee. Customers
accumulate points and get baskets filled with gifts at years end.
- Mundo Nobo Supermarket: There are no registration fees either. At years
end, the customers are eligible to get baskets filled with gifts.
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1 . 3 P r o b l e m s t a t e m e n t a n d r e s e a r c h q u e s t i o n s
Hence, the management at Kong Fui is dealing with the question:
If some families are more loyal than others, a retailer might be able to secure a larger
share of these more profitable customers or perhaps the loyalty of present customers could
be upgraded, according to Cunningham (1961). Either possibility is presumed to help
improve market position. However, the usual competitive efforts to build volume through
higher traffic may merely be able to support the patronage of different stores by low-
loyalty customers (Cunningham, 1961).
Accordingly, the purpose of this study is assessing the effect of some shopping motivators
on customer loyalty. Furthermore, this study evaluates whether there is a difference in
loyalty towards Kong Fui between its members and non-members; thereby assessing
whether membership affects customer loyalty. Consequently, the problem statement is:
In order to facilitate the research process the research problem will be broken down into
some sub-problems, namely:
In solving the main problem, the sub-problems will be used as guidelines. Furthermore, it
will be determined whether the hypotheses are true or false
5
.

5
These hypotheses are based on literature and are therefore presented in the next chapter.
1. Which are the factors and the moderating factors affecting
customer loyalty according to theory?
2. Which is a good set of factors and moderating factors influencing
customer loyalty for a food retailer?
3. Which are the factors and the moderating factors affecting
loyalty program adoption according to theory?
4. Which is a good set of factors influencing loyalty program
adoption for a food retailer?
5. What is the effect of each of the factors in the above stated set on
customer loyalty for the customers of Kong Fui?
6. What is the effect of each of the factors in the above stated set on
loyalty programadoption for the customers of Kong Fui?
What can be done to increase the purchases of their
current customers?
Which are the shopping motivators affecting
customer loyalty?
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1 . 4 M e t h o d o l o g y a n d l i m i t a t i o n s
This study covers the investigation of factors affecting customer loyalty and of the
antecedents of the adoption of loyalty programs by customers; thereby having a double
layer structure. In order to come up with these potential factors of both layers of the
study a literature review will be done. This literature review would lead to a conceptual
model. There after an empirical research will follow, whereby a survey will be used.
Respondents will be asked to fill in a questionnaire covering all the constructs of the
conceptual model. In gathering respondents no limitations will be held concerning
membership. Both card-holders and non-card-holders are approached to participate.
However, the survey would limit itself to adults, since children are not presumed to have
disposable incomes and are therefore not part of the population as such. As stated earlier,
the aim is to study the customers of Kong Fui; therefore the data collection limits itself to
these customers. For further details concerning the methodology please refer to chapter 3.
Restrictions
This study will be subject to the following restrictions:
1 . 5 R e p o r t s t r u c t u r e
The report will be set up as follows:
Chapter two 2 addresses the general background theory. Before coming up with a
conceptual model literature related to customer loyalty in general and the adoption of
loyalty programs, and specifically related to factors directly and moderately affecting them
would be assessed. This chapter therefore deals with sub-problems one through four.
Chapter three 3 covers the research methodology explicitly. This chapter covers topics
such as sample, data collection method, the questionnaire and the method of analysis.
Chapter four 4 presents a general overview of the results of the survey and the results
related to the different relationships as illustrated in the conceptual model presented in
chapter two. Subsequently, chapter five 5 considers all prior chapters in order to draw
conclusions
6
and make suggestions in the form of both research implications and
managerial implications.

6
Concerning the acceptance and rejection of each the tested hypotheses, among others
- The study will be limited to Kong Fui only.
- The respondents will be limited to current customers. However, in the data
collection no distinction will be made between members and non-members.
Only for the analysis this difference will be assessed; whenever it is considered
appropriate to do so.
- The study focuses on assessing the effects between the studied constructs. No
efforts will be made to validate measures for these constructs. It is therefore,
that it is tried to use as much existing measures as possible.
- This study limits itself to the antecedents of customer loyalty. The claimed
effect of customer loyalty on profitability lies outside the scope of this study.
However, from the four companies studied by Reinartz and Kumar (2003) the
grocery retailer had the strongest association between customer longevity and
company profits.
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CHAPTER 2 LITERATURE REVIEW
This chapter covers the results of secondary research to point out the factors influencing
customer loyalty. It starts by providing a definition for loyalty in paragraph 2.1.
Thereafter, the developments regarding research about the antecedents of loyalty is
presented as the state of the art of customer loyalty. In assessing the developments in
literature dealing with this topic, the available factors influencing loyalty will be gathered.
It should be noted here, that since most of these constructs are well established in prior
research, we include them in our model without explicit further discussion. Finally, the
paragraph ends with the coverage of the second sub-question. The subsequent paragraph
deals with the six factors presumed to have a direct effect on customer loyalty. In these
sections the theory will be both analyzed and evaluated. Paragraph 2.3 will present the
developments regarding studies covering the antecedents of the adoption of loyalty
programs. The next paragraph covers the factors presumed to influence the adoption of
loyalty programs. Thereafter, paragraph 2.5 presents the conceptual model and the
corresponding explanations. But, the state of the art on loyalty follows.
2 . 1 S t a t e o f t h e a r t o f c u s t o m e r l o y a l t y
The studies in customer loyalty over the last five decades can be categorized into three
types of studies. First, the period 1960-1990 had studies with a focus on the definition and
operationalization of customer loyalty (i.e. Jacoby and Chestnut 1978). Jacoby and
Chestnut (1978) have explored the psychological meaning of customer loyalty in an effort
to distinguish it from behavioral (i.e. repeat purchase) definitions. Their analysis concludes
that consistent purchasing as an indicator of customer loyalty could be invalid because of
happenstance buying or a preference for convenience and that inconsistent purchasing
could mask customer loyalty if consumers were multi-brand loyal. Due to these
possibilities the authors concluded that it would be unwise to infer loyalty or disloyalty
solely from repetitive purchase patterns without further analysis. Oliver (1999) builds on
this suggestion by pointing out that all three decision making phases must point to a focal
brand preference if true brand loyalty exists. Hereby, he refers to beliefs, attitude and
conation.
Secondly, there were the studies pertaining to the period 1980-2000. In this period the
focus was on the antecedents of self-reported customer loyalty (i.e. Anderson and Sullivan,
1993). Anderson and Sullivan (1993) developed a model to link explicitly the antecedents
and consequences of satisfaction in a utility-oriented framework. The data were obtained
by a computer-aided telephone survey, whereby the customers were required to provide
their satisfaction, repurchase intentions, expectations, perceived quality, degree of
disconfirmation/confirmation (the extent to which perceived quality fails to match pre-
purchase expectations), and ease of evaluating quality, all on a 10-point scale.
Consequently, the respondents directly answer their repurchase intentions.
Finally, there are studies focusing on antecedents of objective customer loyalty, the so-
called customer asset management studies (i.e. Bolton and Lemon 1999). Bolton and
Lemon (1999) based their research on panel data in which the same customers are re-
interviewed over time so that changes in their opinions could be assessed. The databases
used contained both actual as well as self-reported measures of usage levels. However,
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they used the actual measures since these are statistically related to satisfaction measures
according to Bolton and Lemon (1999; cited Collopy 1996). In this it is assumed that light
users tend to over-report their usage, whereas heavy users tend to under-report their
usage.
Two dimensions of loyalty
However, although the concept of customer loyalty has been extensively discussed in
traditional marketing literature, there is no universally accepted definition for loyalty.
There are people, who claim that it should be measured by customers share of wallet
while others say it should be based on the customer retention rate. There are still others
proclaiming frequency as the best measure, while others claim it's the customers' attitude
towards the company that best describes loyalty (Woolf, 2002). Still, the main emphasis
has been on two different dimensions of the concept, namely behavioral- and attitudinal
loyalty.
Before the 1970s, the majority of researchers measured loyalty as a pattern of repeat
purchasing behavior. The attitudinal perspective on customer loyalty appeared after that
period. A highly relevant model for the measurement of grocery store loyalty in this
respect is the one proposed by Oliver (1997). In this work the four-stage loyalty model was
proposed, as illustrated in figure 2.1.
Figure 2.1: The four-stage loyalty model
Source: Oliver (1997)
Keller (2003) applies behavioral loyalty as a dimension of brand resonance; however,
defining behavioral loyalty at the brand level. At the store level behavioral loyalty would
mean repeat purchases and the amount or share of category volume attributed to the
store. Hereby, it encompasses both how often customers visit a store (and make their
purchases there) and how much they purchase at that store.
Conversely, Reichheld (2003) defines customer loyalty from a relationship perspective. In
this respect, he defines customer loyalty as the willingness of someone a customer, an
employee, a friend to make an investment or personal sacrifice in order to strengthen a
relationship. For a customer, this can mean sticking with a supplier who treats him well
and gives him good value in the long term even if the supplier does not offer the best price
in a particular transaction. Building on this definition, he argues that customer loyalty is
much more than repeat purchases. Inertia, indifference or exit barriers may exist.
According to Noordhoff, Pauwels and Odekerken-Schrder (2004) behavioral store loyalty
is expressed by the actual revisiting of the store and the total budget ratio spent at a single
Cognitive loyalty
Affective loyalty
Conative loyalty
Action loyalty
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store; the so-called share-of-wallet. As a central dependent construct, behavioral store
loyalty is still popular even though authors as Reinartz and Kumar (2002) to name a few
expressed fundamental criticism. In fact, purchase behavior does not always provide the
accurate loyalty measure, given that other moderating variables such as social norms and
situational influence, both studied by Huddleston et al. (2004), manipulate a decision to
patronize a store. Therefore, some authors i.e. Reinartz and Kumar (2002) point out
that it would be useful to complement purely purchase behavior measures of customer
loyalty with attitudinal measures. Attitudinal loyalty refers to the consumers
predisposition towards a store as a function of psychological processes, [which] includes
attitudinal preference and commitment towards the store (Jacoby and Chestnut, 1978).
The addition of attitudinal measures could help in making a clear distinction between
inertia and convenience against pure behavioral loyalty. Jacoby and Chestnut (1978)
investigated both behavioral- and attitudinal loyalty thereby finding out that the effects of
loyalty are much lower in case of only behavioral loyalty. They suggest that for companies
to identify the real apostles, they need to judge customers by more than just their
actions. The ambassadorship of customers showed quite a big increase when customers
were both behaviorally- and attitudinally loyal.
Measures for attitudinal loyalty are trust, commitment, satisfaction, attractiveness and
switching costs among others. Conversely, the measures for behavioral loyalty can be
divided into transactions and non-transactions. In the category of transactional measures
there are items such as retention, cross-buying, usage/repeat purchase, upgrading and
customer share/share of wallet. Furthermore, Rowley (2005) suggests relationship
continuance, increased scale or scope of relationship, and recommendations to be loyalty
behaviors as well. Regarding the non-transactional measures there are customer
referrals/word-of-mouth and supportive behavior/complaints.
This study builds on the second type out of the three mentioned in the beginning of this
paragraph. This study tries to assess the antecedents of self-reported customer loyalty.
Hereby the data will be collected by gathering answers directly from respondents.
Leenheer (2004) points out based on literature review that the marketing literature
provides a wide range of customer loyalty measures. The usefulness of these measures
appears to be dependent on the specific market and study objective. Leenheer (2004)
continues citing that in grocery retailing, purchase behavior is characterized by high
buying frequency and variation in basket sizes. Additionally, consumers are often
polygamous loyal. Based on these characteristics, share-of-wallet is the most suitable
measure for behavioral loyalty (Mgi, 2003). However, due to the strong subjectivity of this
measure it is not used in this study.
2 . 2 F a c t o r s a f f e c t i n g l o y a l t y
A quite extensive literature review revealed that there are different ways in which the
factors presumed to affect both dimensions of customer loyalty are classified. Some
researchers just leave the studied factors unclassified, while others group them into multi-
attribute constructs based on e.g. factor analysis and still others use the categorization of
Oliver (1997) as starting point. By basing studies on this model, it is meant that the
researchers do not use the exact same items as the original model; however, the division of
loyalty into the natures of loyalty is maintained (for more details see e.g. Dick and Basu
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1994). Examples of studies based on the four-stage loyalty model of Oliver (1997) include
Huddleston et al. (2004) and Sawmong and Omar (2004).
Secondly, there is the stream of researches which study the items, affecting both
dimensions of customer loyalty, separately. Examples of this stream are Huddleston et al.
(2004) where focus group interviews revealed promotions, price, convenience, location,
product, atmosphere and service to be the factors that respondents liked about their
retailer and Bellizi and Bristol (2004) which study revealed check-out, variety of fresh
produce, location, fresh meat department, fresh bakery, deli counter and low prices as the
most important loyalty influencing factors.
Finally, there is the category of studies using multi-attribute constructs. Although most of
these multi-item constructs have been studied in the grocery retail industry, the multi-
item constructs perceived trust, perceived value, overall satisfaction and future Internet
Service Provider expectancy have been studied for an Internet service provider (Chiou,
2004) not in a grocery retail context as far as this review goes. Additionally, the service
quality performance, value and customer satisfaction multi-attribute constructs have been
studied for six service industries (Cronin Jr., Brady and Hult, 2000). So, customer
satisfaction is a construct that has been studied both in grocery retailing and in non-
grocery retailing studies.
Cortias, Elorz and Villanueva (2004) also used multi-attribute constructs. However, these
were investigated as antecedents of satisfaction, which was further studied as an
antecedent of customer loyalty. The added-value of that study is that it investigated the
relations both in the grocery industry and at petrol stations. Majumdar (2005) also takes a
new dimension in this type of studies by studying stores in a shopping mall. Based on the
setting of the study, the loyalty of shoppers towards the shopping mall was also taken into
account as an antecedent of store loyalty intention. Besides shopping mall loyalty, value
perception, sales promotion and overall impression of the store have also been
incorporated in that particular study as antecedents of store loyalty intention. Still, a
strange part of the data collection was that only garment store shoppers were intercepted,
although a shopping mall generally has a wide variety of stores in it.
Other studies belonging to this category include Verhoef, Franses and Hoekstra (2002),
Verhoef, Franses and Donkers (2002), Seiders et al. (2005) and Verhoef and Franses
(2003). Verhoef, Franses and Hoekstra (2002) studied the effect of relational constructs on
customer referrals and number of services purchased. This study was performed on the
customers of an insurance company. They included relationship age as a moderator on the
relationship between the relational constructs and loyalty. The relational constructs
included satisfaction, both affective- and calculative commitment, and payment equity.
The loyalty measures were customer referrals and number of services purchased. Verhoef,
Franses and Donkers (2002) also included referrals and number of services in their study.
However, they restricted the studied relationships to the effects of satisfaction and
payment equity on these loyalty measures. Note that this study was also performed in the
insurance branch. Verhoef and Franses (2003) studied the effects of commitment,
satisfaction and word-of-mouth on behavior. In this regard, both stated and revealed
behavior was investigated and the measures of behavior in this study were customer
retention, cross-buying and customer share. Seiders et al. (2005) also studied both self-
reported and objective repurchase behavior. Their study investigated the effect of
satisfaction on both number of visits and dollars spent in a specialty retail chain. Besides
investigating that direct effect, they studied the moderating effect of customer-, relational-
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and marketplace characteristics. The customer characteristics studied included both
involvement and household income, whereas the relational characteristics were
relationship age and program participation and the marketplace characteristics were
competitive intensity and convenience offering.
Retail/food multi-attribute antecedents
These multi-attribute constructs presumed to influence loyalty include customer
satisfaction, customer-card possession, service quality and value (Sawmong and Omar,
2004; Noordhoff, Pauwels and Odekerken-Schrder, 2004; Chiou, 2004). Besides these
presumed antecedents of loyalty, an extensive literature review by Landsverk, Hughes and
Fearne (2003) revealed that there are seven key elements in the retail brand. These seven
elements are said to be physical store, service products, fresh food concepts/products, own
label products, communication, price positioning and quality standards in different
product areas, and access attributes (Landsverk, Hughes and Fearne, 2003). Piron (2001)
studied the predictability of location, store image, merchandise price, merchandise
assortment, merchandise quality, service and advertisement and promotion for store
loyalty in the grocery retail industry under Singaporean shoppers. In addition, Sirohi,
McLaughlin and Wittink (1998) studied three important links based on their model,
namely the effects of extrinsic cues on merchandise quality perceptions, the antecedents of
perceived value and the determinants of the store loyalty intentions. Thereby they used
eight constructs to measure respondents perceptions. These measures were store
operations perception, store appearance perception, personnel service perception, sales
promotion perception, merchandise quality perception, perceived relative price, perceived
value and perceived value of competitor. The effects of all but three constructs on store
loyalty intentions were separately assessed. In this regard, they have combined store
operations perception, personnel service perception and store appearance perception into a
single item and assessed its effect on store loyalty intentions.
Yet another category
Besides these categories of antecedents, length, depth and breadth of the relationship have
also been studied as antecedents of loyalty (Verhoef, 2001). In this regard, it is assumed
that this study belongs to yet another category of studies. These antecedents effect on
purchase behavior was thereby assessed in service industries. The author points out that
the studied antecedents of purchase behavior are reflected in different purchase behaviors
in the investigated industries.
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2 . 3 A n t e c e d e n t s a n d m o d e r a t i n g f a c t o r s o f c u s t o m e r
l o y a l t y f o r f o o d r e t a i l e r s
In short, the antecedents of both attitudinal- and behavioral loyalty can be divided into the
following general categories (adapted from Verhoef, 2003):
From these antecedents presented above this study assesses customer satisfaction
(perceptions of relationship), loyalty programs adoption (marketing instruments),
customer characteristics, shopper characteristics and shopping motivation as antecedents
of customer loyalty towards their grocery store; particularly towards Kong Fui. So, the aim
was to include items covering each of the six general categories affecting both attitudinal-
and behavioral loyalty. However, past behavior was not assessed. Although frequency of
purchase in the past was indirectly assessed it was studied as a measure of behavioral
loyalty, not as a potential predictor.
Consequently, potential antecedents as discussed in the previous paragraph which are
assumed to be irrelevant due to some reason have been left out of this analysis. These
potential antecedents include location and communication. Location is irrelevant, since the
supermarket is already settled there for years and at the moment the only way to change
it is to open the store somewhere else. The marketing activities of the supermarkets on
Aruba are minimal, so it is presumed as irrelevant to incorporate communication as an
antecedent in the study. The availability of own label products is also irrelevant in this
study, since Kong Fui does not carry private label brands/products. Finally, both
merchandise assortment and -quality are considered as irrelevant due to the competitive
pressure that in some degree dictates them. However, to have a better insight into the
aspects of customer satisfaction at Kong Fui, these items are incorporated into the study
as well, but as single-items. However, these items are not illustrated in the conceptual
model of figure 2.2, since their influence on customer satisfaction and/or customer loyalty
is beyond the scope of this study.
Shopper characteristics
According to Mgi (2003), a number of studies on grocery shopping behavior have related
customer share in the primary store to a range of consumer characteristics. She points out
that although her research conveys a somewhat fragmented picture of consumer-level
- Perceptions of relationship or offerings of suppliers. In this category items such
as commitment, satisfaction, and trust are represented.
- Marketing instruments. Here it can be thought of instruments like direct
marketing, loyalty programs and advertising.
- Past behavior. Items belonging to this category are relationship age, number of
products sold and RFM (recency, frequency and monetary value) among others.
- Customer characteristics. This category encompasses items such as age, income,
education and household size among others.
- Shopper characteristics. The three shopping motivations of Mgi (2003) belong
to this category.
- Shopping motivation. Hereby a distinction is made between utilitarian shopping
motives and hedonic shopping motives.
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correlates with customer share, some results stand out as fairly consistent across studies.
She used three shopper motivations, which are shopper types identified by other
researchers as well. Therefore, it is presumed that they represent some of the core
motivational drivers of grocery shopping behavior.
Jamal et al. (2006)s literature review revealed a stream of authors arguing that the
management of retail firms in other cultures requires an understanding of, and responding
to, the local consumers motives, value, lifestyles, perceptions, attitudes and needs. This
need is assumed to be especially important for the personalizing shopping oriented
shoppers. With this in mind this section covers shopper characteristics, whereby a
distinction will be made between economic-, personalizing- and apathetic shopping
orientation. According to Mgi (2003) these characteristics represent some of the core
motivational drivers of grocery shopping behavior.
Mgi (1999) points out that the consumers who appreciate the social dimension of
shopping tend to concentrate their purchases at a specific store, since that would make it
easier to build and maintain relationship with store personnel. Therefore, it is expected
that the personalizing shopping orientation has a positive effect on both behavioral- and
attitudinal loyalty. That expectation leads to:
Furthermore, Mgi (1999) points out that the negative effect of being a price-oriented
consumer on customer share in the primary store is intuitive. Consumers who perceive
benefits from comparing prices across stores would be more likely to spread their
purchases evenly across stores in their pursuit of good deals than consumers who do not
find across-store price comparisons worthwhile. Therefore,
Similarly, the degree of apathetic shopping or un-interest in shopping has some effect on
behavioral loyalty. According to Williams et al. (1978) the more apathetic the consumer,
the likelier that he/she would concentrate purchases to one store to minimize the energy
spent on grocery shopping. This concentration of purchases can be seen as a form of
behavioral loyalty. Additionally, it is expected here, that this same un-interest in shopping
would influence the attitude of consumers towards shopping negatively. Therefore,
Shopping motivation
Existing literature has sought to develop typologies of shoppers based either on shopping
motives (Arnold and Reynolds, 2003) or on decision-making styles (Lysonski et al., 1996)
among others. Arnold and Reynolds (2003) came up with a six-factor hedonic shopping
motivation profile classification. However, due to the magnitude of this investigation the
H1.3a: Apathetic shopping orientation has a positive effect on behavioral loyalty.
H1.3b: Apathetic shopping orientation has a negative effect on attitudinal loyalty.
H1.2: Economic shopping orientation has a negative effect on behavioral loyalty.
H1.1a: Personalizing shopping orientation has a positive effect on behavioral loyalty.
H1.1b: Personalizing shopping orientation has a positive effect on attitudinal loyalty.
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shopping motives will be restricted to a general classification of hedonic and utilitarian
motivations. Additionally, the aim of this investigation is to come up with consumer
profiles based on a combination of factors instead of really going into details for each of
these factors. Therefore, it was assumed unnecessary to use that six-factor hedonic
shopping motivation profile instead of only dividing shopping motivation into hedonic
shopping and utilitarian shopping.
Since hedonic shopping motives deal with the basic premise that shoppers are motivated
by non-product related attributes, it is assumed in this study that hedonic shoppers would
be more willing to become loyal to a firm. Consequently, it is expected that the following
hypotheses hold:
Customer satisfaction
Customer satisfaction is widely assumed to be an antecedent of behavioral loyalty. In
Oliver (1997) satisfaction is defined as pleasurable fulfillment. That is, the consumer
senses that consumption fulfills some need, desire, goal or so forth and that this fulfillment
is pleasurable. It is presumed that the higher the degree of satisfaction of a customer the
stronger his/her behavioral loyalty. Anderson and Sullivan (1993) found that the elasticity
of repurchase intentions with respect to satisfaction is lower for firms that provide high
satisfaction. According to them this implies a long-run reputation effect insulating firms
which consistently provide high satisfaction. This implies that there is a relationship
between customer satisfaction and behavioral loyalty. Even stronger their findings
support the implication that there is a positive relation between satisfaction and
behavioral loyalty.
However, Mgi (2003) found only a moderate effect of customer satisfaction on share of
wallet. Consequently, that study did not get significant evidence for a strong relation
between customer satisfaction and behavioral loyalty. Furthermore, it was found that this
effect is influenced negatively by both the economic orientation and personalizing shopping
behavior of customers. However, aggregate purchase volume seemed to have a positive
influence on that effect. Therefore, the following hypotheses are expected to hold:
H3.1a: Customer satisfaction has a positive effect on behavioral loyalty.
H3.1b: Customer satisfaction has a positive effect on attitudinal loyalty.
H3.2a: The effects of customer satisfaction on behavioral loyalty are moderated by
shopper characteristics.
H3.2b: The effects of customer satisfaction on attitudinal loyalty are moderated by
shopper characteristics.
H2.1a: Hedonic shopping motivation has a positive effect on behavioral loyalty.
H2.1b: Hedonic shopping motivation has a positive effect on attitudinal loyalty.
H2.2a: Utilitarian shopping motivation has a negative effect on behavioral loyalty.
H2.2b: Utilitarian shopping motivation has a negative effect on attitudinal loyalty.
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Loyalty program adoption
There are different actions which firms can take to enhance relationship equity. Rust,
Lemon and Narayandas (2005) defined relationship equity at the brand level. At the store
level, it would be defined as the tendency of the customer to stick with the store, above and
beyond the customers objective and subjective assessments of the store. Research in
relationship equity revealed loyalty programs, affinity programs, community building
programs and knowledge building programs as the key drivers of relationship equity.
Loyalty programs are the set of actions taken by firms to reward their customers for
specific behaviors (Rust, Lemon and Narayandas 2005). These rewards may be both
tangible- and intangible benefits. Altogether, these drivers may help firms to maximize the
likelihood of customer repurchase, maximize the value of a customers future purchases or
even reduce customer churn. Therefore, loyalty programs are thought to have a positive
effect on behavioral loyalty. It is assumed that due to the benefits that someone gets by
participating in a loyalty program, people are eager to become loyal to firms with these
programs.
Mgi (2003) provided evidence that the presumed positive relationship between loyalty
program and behavioral loyalty can not be supported. This lack of support was however
only found at the store level. At the chain level however, a positive effect was found for
members holding only the focal chains card. Thus, although loyalty card ownership does
not seem to affect share of wallet at the store level, there was enough evidence for it to be
influential at the chain level. Therefore, it is not surprising that Leenheer (2004) also
found evidence supporting the influence of loyalty programs on share of wallet.
Consequently, it is assumed here that there is a relationship between loyalty program
adoption and behavioral loyalty. This assumed relationship translates into the following
hypotheses:
Customer characteristics
Last but not least, it is assumed intuitively that customer characteristics, being gender,
age, education level, income and household size would influence store loyalty under
customers. Therefore, the following set of hypotheses is expected to hold.
H5.1a: Customers gender influences behavioral loyalty.
H5.1b: Customers gender influences attitudinal loyalty.
H5.2a: Customers age influences behavioral loyalty.
H5.2b: Customers age influences attitudinal loyalty.
H5.3a: Customers educational level influences behavioral loyalty.
H5.3b: Customers educational level influences attitudinal loyalty.
H5.4a: Customers income level influences behavioral loyalty.
H5.4b: Customers income level influences attitudinal loyalty.
*** Note: the last four of the set are shown on the next page ***
H4a: Loyalty program adoption has a moderate effect on behavioral loyalty.
H4b: Loyalty program adoption has a moderate effect on attitudinal loyalty.
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Acculturation preference
Another attribute of customers to be studied here is the one presented by Swaidan et al
(2006). They investigated the role of acculturation in shaping consumers views of ethics.
Specifically, their study examined the relationships between the desire to keep ones
original culture, the desire to adopt the host culture, and the four dimensions of consumer
ethics scale of Muncy and Vitell (1992). In this study instead of assessing the role of
acculturation, consumers preference towards acculturation of the food retail staff will be
investigated. The aspect is incorporated in the study, since e.g. by adopting the host
culture the language barrier could be bridged whereby it would be easier for the consumer
to build and maintain a relation with store personnel.
Furthermore, most of the supermarkets on Aruba are owned and operated by Chinese.
Consequently, it is assumed that the preference of consumers towards the adoption of the
host culture by these Chinese could have some influence on customer loyalty. Hereby it
can be thought of the communication barrier that would exist when there is direct contact
between the consumers and (one of) these Chinese and when the latter can not understand
the host language. Consequently, it is expected that both behavioral- and attitudinal
loyalty are influenced to consumers acculturation preference. This assumption translates
into the hypotheses:
2 . 4 F a c t o r s a f f e c t i n g l o y a l t y p r o g r a m a d o p t i o n
For a better insight into loyalty program (LP) adoption, the reasons for people to adopt
loyalty programs are incorporated in this study as proposed by Mgi (2003). The primary
aim of loyalty programs is to stimulate customers to patronize the same retail store in a
structural way (Leenheer, 2004). Its ultimate goal is to improve both attitudinal- and
behavioral loyalty. Sharp and Sharp (1997) defined a loyalty program as a suppliers
structural effort to increase customers attitudinal- and behavioral commitment to the
suppliers market offering. Consumers perceive this loyalty program as an organized
marketing activity which offers (some of) the customers additional rewards or benefits
(DeWulf et al., 2003 in Noordhoff, Pauwels and Odekerken-Schrder, 2004). However, the
extant literature does not show agreement on the minimal characteristics of a loyalty
program (Noordhoff, Pauwels and Odekerken-Schrder, 2004).
When deciding whether to participate in a companys loyalty program, a customer
generally compares the expected benefits and cost (Leenheer, 2004). In this regard, Graeff
and Harmon (2002) implied that loss of privacy, loss of control over personal information,
cumulative amount of money spent and possible subscription fees are the main obstacles
H5.5a: Customers household size influences behavioral loyalty.
H5.5b: Customers household size influences attitudinal loyalty.
H5.6a: Customers income inflow frequency influences behavioral loyalty.
H5.6b: Customers income inflow frequency influences attitudinal loyalty.
H6a: Acculturation preference influences behavioral loyalty.
H6b: Acculturation preference influences attitudinal loyalty.
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for a customer to adopt a loyalty program. Therefore, it can be presumed that there are
more aspects taken into consideration when taking this decision than only the cost-benefit
ratio. Nevertheless, customers should be given some sort of compensation for disregarding
these obstacles. The most obvious compensation in this regard is the rewards which
customers are given for their participation in the scheme. But, are these enough to
compensate the customers for their participation albeit these barriers. There are at least
five other elements which are supposed to help companies compensate this action of their
customers. In this regard, OBrien and Jones (1995) identified cash value, choice of
redemption options (the range of rewards offered); aspirational value (how much the
customer wants the reward); relevance (the extent to which rewards are achievable); and
convenience (ease of participation in the scheme) as elements that contribute to the value
of a loyalty scheme. Consequently, it can be mentioned that Kivetz and Simonson (2002
and 2003) assess the relevance-element of OBrien and Jones (1995) by their examination
of the effect of the level of effort required to obtain an LP reward on consumers perception
of the LPs attractiveness.
Consumers are often promised a delayed reward, contingent on the performance of future
effort. According to Soman (1998), in such situations, at the time of brand choice, the
future effort is underweighted, relative to the future savings. Consequently, the time
interval between the times of brand choice in this regard, time of store choice and of
redemption could make an attractive incentive seem unattractive or vis--vis.
Additionally, Leenheer (2004) studied the effect of instrumental variables, store
characteristics, loyalty program design and initial share of wallet on loyalty program
adoption by customers. The instrumental variables investigated were loyalty program
enjoyment and privacy concerns, whereas the store characteristics were distribution
density and price level. Regarding the design of the loyalty program, she studied the effect
of the promotion- and saving rewards. Furthermore, the moderating effect of household
characteristics on the link between store characteristics and loyalty program adoption was
assessed. Regarding loyalty program design, Leenheer and Bijmolt (2003) examined the
effect of household size on the type of loyalty program adopted. Thereby a distinction was
made between loyalty programs giving price discounts, those where points are earned and
those giving special service.
Related to the adoption of loyalty programs, Graeff and Harmon (2002), examined the
extent to which consumers are concerned with how their personal information is collected
and used, their awareness and knowledge of data collection practices using loyalty cards
and the relationship between demographics and privacy concerns. They measured the
familiarity with loyalty programs and the level of knowledge about how these cards are
used. Regarding the assessment of the familiarity, they asked consumers whether they use
grocery loyalty cards or not. Moreover, the privacy concerns of customers have been
investigated. Privacy concerns were assessed both regarding the information and the
comfort using credit cards.
Furthermore, there are studies which examined the influence of demographic
characteristics on loyalty program adoption. Cunningham (1961) examines the relation
between size of food expenditures and loyalty. Thereby, it can be assumed that the size of
food expenditures is closely related to family size. Vakratsas (1998) assesses the effect of
demographic variables including employment status of female head, household size and
household income on household purchases. The measure used to assess household
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purchases was household purchase timing decisions and in particular purchase
acceleration due to promotions.
Although an extensive set of factors affecting loyalty program adoption have been outlined
in the lines above, this study would focus on the effect of loyalty program enjoyment,
idiosyncratic fit, loyalty program design, household characteristics and privacy concerns on
loyalty program adoption at Kong Fui. This set of factors has been chosen, since it is
assumed that these are the factors relevant in the retail food context. Note, however, that
as was the case with the antecedents of customer loyalty, the expectations related to these
factors will be adopted as much as possible from prior research.
2 . 4 A n t e c e d e n t s a n d m o d e r a t i n g f a c t o r s o f l o y a l t y
p r o g r a m a d o p t i o n f o r f o o d r e t a i l e r s
Loyalty program enjoyment
Loyalty program enjoyment stimulates participation in loyalty programs, according to
Leenheer (2004). Thereby it has been shown that some customers derive benefits, which
are beyond purely economic benefits, from a loyalty program. Therefore, it is proposed here
that:
Idiosyncratic fit
The logic of idiosyncratic fit is that the consumers perception of the LPs attractiveness
will have a positive effect on the shopping motive of the consumer. Kivetz and Simonson
(2003) propose that in certain conditions, increasing program requirements can enhance
consumers likelihood of joining the program, thus leading consumers to prefer a
dominated option. In their study they obtained evidence for their hypothesis that
consumers often evaluate LPs on the basis of their individual effort to obtain the reward
relative to the relevant reference effort (e.g. the effort of typical other consumers).
Furthermore, when consumers believe they have an effort advantage over typical others
(i.e. an idiosyncratic fit with the LP), higher program requirements magnify this
perception of advantage and can therefore increase the overall perceived value of the
program.
Therefore, this consumers idiosyncratic fit heuristic will be assessed in the study for
presumably having some positive influence on the loyalty card ownership. This translates
into the following hypothesis:
HA2: Consumer perception of idiosyncratic fit influences the participation in
loyalty programs positively.
HA1: Consumers loyalty program enjoyment influences the participation in
loyalty programs positively.
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Loyalty program design
Furthermore, Leenheer and Bijmolt (2003) propose that large households tend to adopt
loyalty programs giving price discounts over those where points are earned and those
giving special service, which translates into the following hypothesis:
Soman (1998) demonstrates empirically that face value, level of effort and temporal delays
have effects on choice, redemption and profits. Results of that study show that temporal
delay between choice and redemption causes a systematic underweighting of future effort,
which mediates the increased attractiveness of alternatives with delayed incentives.
Cunningham (1961) illustrates that there are no significant correlation between total food
expenditures and loyalty. Store loyalty appears to be independent of the total amount
spent for food purchases by a particular family. Vakratsas (1998) suggests that all the
three demographic variables, she used in her study, have a significant effect on purchase
acceleration. The study categorizes these three demographic variables as household
characteristics and based on these results assesses their effect on loyalty programs
adoption.
Households of larger size have higher consumption rates. Since these big household buy
more, they would get more rewards by participating in loyalty programs. Their ability to
get more rewards would then be presumed to influence their adoption of loyalty programs,
which leads to the following hypothesis:
However, Leenheer and Bijmolt (2003) propose that households with higher incomes value
the economic benefits of loyalty programs less than households with lower incomes.
Therefore, a higher income household is expected to be more inclined to adopt a loyalty
program, which leads to:
Similarly, Blattberg et al. (1978) point out that higher income households have access to
more information and generally have more resources. This reasoning is in line with the
empirical results of their study where upper income households (without controlling for
other demographics) were shown to be more deal-prone than low income households.
However, generally speaking, high income households are less price sensitive than low
income households (Blattberg et al., 1978). Furthermore, high income households are
expected to have higher opportunity costs of time with income being considered a time
constraint variable. Assuming that these opposite expected effects of income can be
offsetting, both high and low income households would have low deal-proneness, whereas
only the middle incomes would have high deal-proneness. It is presumed that the effect of
household income is also related to the degree of participation in loyalty programs. Since
the relation between deal-proneness and household income has been supported by
HA4.2a: Household income influences loyalty program adoption.
HA4.1: Household size has a positive effect on loyalty programs adoption.
HA3: Loyalty program design influences consumers adoption of loyalty programs.
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Vakratsas (1998), it is expected that the following hypothesis which takes the last one a
step further holds:
Mgi (2003) expected elderly to have more loyalty cards than younger people. This was
expected due to the availability of time that the elderly have to visit different stores.
Consequently, these elderly are also expected to have higher participation rates of loyalty
programs than younger customers, leading to the hypothesis:
The employment status of the female head of the household can signal a household's
opportunity costs of time. Blattberg et al. (1978) found empirical support for the
proposition that households with non-working housewives are more deal-prone. In this
regard it is assumed in this investigation that households with non-working housewives
would participate in different loyalty programs. Narasimhan (1984) was based on a
slightly different context the study of coupon usage as an aspect of deal-proneness.
However, similar results were obtained. In situations where the female head of the
household is unemployed or not employed in a full-time capacity, there is more time for
that household to evaluate a promotion and assess whether or not purchase acceleration
would lead to considerable savings. Consequently, also supporting the assumption that
when the female head of the household is unemployed or working part-time the household
would be participating in different loyalty programs. This assumption is based on the logic
that since they would have more time to evaluate promotions or look for better prices, they
would know how to distribute their purchases between the different firms with loyalty
programs thereby getting most rewards possible. Consequently, it is hypothesized that:
Privacy concerns
Yet another determinant of loyalty program adoption by customers is privacy concerns.
Leenheer (2004) found as stated earlier that customers privacy concerns withhold
them from registering for loyalty programs, leading to the hypothesis:
HA5: Privacy concerns have a negative effect on loyalty program adoption by customers.
HA4.4: Head of household employment status influences their participation in
loyalty programs.
HA4.3: Customers age influences loyalty program adoption.
HA4.2b: Middle income households have a greater rate of participation in loyalty
programs than low and high income households.
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2 . 5 C o n c e p t u a l m o d e l
In the previous sections, the state of art on both customer loyalty and loyalty program
adoption were covered. Furthermore, the antecedents of both customer loyalty and loyalty
program adoption as to be investigated here have been extensively discussed. However,
in order to give an illustration of the relationships that will be investigated, a conceptual
model has been constructed. A conceptual model connects the theories that play an
important role in the research objective (De Leeuw, 1996).
Figure 2.2: Conceptual model
H6
HA4a -- HA4e
HA1
Competitive
loyalty programs
LP design
HA5
HA2
Loyalty
program
design
HA3
Idiosyncratic
fit
H5a -- H5e
H2 Shopping
motivation
H4
Privacy concerns
H1a -- H1d
Acculturation
preference
Loyalty
program
enjoyment
H3a -- H3c
Customer
Loyalty
Customer
Satisfaction
Shopper
characteristics
Loyalty program
adoption
Customer
characteristics
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- 23 -
As has been explained earlier, the conceptual model has a double layer set of relationships.
The layer dealing with antecedents of loyalty program adoption can be further divided into
a set of direct and indirect effects. Concerning the main layer, the direct relationships to be
studied are between:
The direct relationships to be studied as illustrated in the second layer are between:
Besides these direct effects, the second layer covers the following moderating effects:
- Loyalty program design, and
- Competitors loyalty program adoption
- Loyalty program enjoyment and loyalty program adoption
- Idiosyncratic fit and loyalty program adoption
- Loyalty program design and loyalty program adoption
- Customer characteristics and loyalty program adoption
- Privacy concerns and loyalty program adoption
- Shopper characteristics and customer loyalty; both attitudinal and
behavioral loyalty
- Shopping motivation and customer loyalty; both attitudinal and
behavioral loyalty
- Customer satisfaction and customer loyalty; both attitudinal and
behavioral loyalty
- Loyalty program adoption and customer loyalty; both attitudinal and
behavioral loyalty
- Customer characteristics and customer loyalty; both attitudinal and
behavioral loyalty
- Acculturation preference and customer loyalty; both attitudinal and
behavioral loyalty
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CHAPTER 3: RESEARCH METHODOLOGY
This chapter covers the design of the consumer survey. This is one component of the most
essential part of the research. The other component of this essential part encompasses the
results of the consumer survey and is covered in the next chapter. This chapter starts with
the operationalization of the model, followed by a description of the sample. Thereafter, a
discussion of the questions that are used in the quantitative research follows. The chapter
ends with a discussion of the methods of analysis.
3 . 1 I n t r o d u c t i o n
The study is restricted to the determinants and moderators influencing customer loyalty
and loyalty program adoption as proposed by prior studies and where presumed necessary
complemented by observations concerning the situation in food retail on Aruba. In this
regard, both behavioral- and attitudinal loyalty antecedents are studied.
3.1.1 Operationalization of model
The items used to measure the three orientations part of the shopper characteristics of
Mgi (2003) provided a high internal consistency. Therefore, these items will be used in
this investigation as well. It should be mentioned that since they are stated in a general
way, there was no need to adapt their wording very much to the situation under
consideration. However, whereas she used primary grocery store in her items, here the
items will be specified to Kong Fui, since Kong Fui is the focal grocery store under
investigation. However, the 10-point scale she used will be adapted to a 9-point scale. This
is done to be able to give respondents the availability of an average score. Furthermore,
the 5-point or 7-point scale was not adopted, in order to prevent the loss of even more
information as a result of range restrictions and coarseness which can attenuate the
ability to detect significant interaction effects that truly exist in the population (Russell
and Bobko, 1992 in Seiders et al., 2005). In this, range restriction occurs when information
is lost due to the inability of the highest and lowest point on the scale to accurately capture
extreme variations in the construct of interest. Similarly, coarseness refers to the loss of
information when one-point scale variations do not accurately capture within-range
variation in the construct of interest (Seiders et al, 2005). However, range-restricted and
coarse scales may capture direct linear relationships with other constructs, especially if
the two measure share common method variance and response bias (Bolton, 1998).
Consequently, there will be a total of 12 questions in the survey which will be used to
assess the different shopper characteristics. In this it is assumed that the customers of
Kong Fui have the same three different characteristics as the customers investigated by
Mgi (2003).
Antecedents of customer loyalty
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Shopping motivation
Due to the unsuitability of the items used in prior research such as Arnold and Reynolds
(2003), the items used to assess shopping motivation are based on intuitive in this study.
The items used in this regard are I enjoy shopping for groceries, I feel thrilled to shop for
groceries, I feel freed from domestic chores when shopping for groceries and I go grocery
shopping exclusively to get the groceries I need. For all these four items a 9-point scale of
completely disagree to completely agree will be used. The reason for the adoption of the
9-point scale is the same as the one stated above and cited from Seiders et al. (2005).
Customer Satisfaction
The antecedents of customer satisfaction are to be assessed by an adapted version of the
items as used by Gmez et al. (2004). Gmez et al. (2004) expressed changes in customer
satisfaction as a function of a vector of changes in the three factors (customer service,
quality and value). The adaptations include accuracy of scanning process at checkout,
cleanliness of parking lot, prices of loyalty card specials, availability of loyalty card specials
and variety of advertised loyalty card items. Both accuracy of scanning process at checkout
and cleanliness of parking lot will be replaced in the survey. The decision to replace these
two items was made due to the fact that they are the two items with the smallest factor
loadings towards the customer service construct anyway. However, instead of these two
items the items service provided by the fresh meat department personnel and service
provided by the cosmetics department personnel will be added. The addition of these two
items is based on the implicit purpose of this study to assess whether there is some
dissatisfaction with the service provided where there is direct contact between the
customers and the personnel in the supermarket. The other three items will be taken out
of the survey, since they are unsuitable for the supermarket-loyalty card combination
under investigation. Conversely, merchandise quality and merchandise assortment were
added to the set.
It is assumed that the 18 items which will be utilized to assess the antecedents of customer
satisfaction would be reduced to the same three factors as was the case in the study of
Gmez et al. (2004). However, the 6-point scale that was used there is adapted here to a 7-
point scale in order to have an average option and in order to prevent loss of information
as discussed previously. Furthermore, the wording of the scales is slightly adapted from
very poor to excellent into very poor to very good.
Conversely, the measures for customer satisfaction as such have been adopted from Mgi
(2003). For the items How well does your primary grocery store match your expectations?
and Imagine a perfect grocery store. How close to this ideal is your primary grocery
store? the same 10-point scale was maintained. However, for the item How satisfied are
you with your primary grocery store? the scale was reduced to a 5-point scale. The reason
for this reduction was to give the customer a concrete label with each of the scaling-points.
This is assumed to be more comfortable for them, when answering the question.
The respondents will be asked whether they hold a membership card of one of the grocery
stores on Aruba having loyalty programs. Whether the respondents have the loyalty card
of Kong Fui or not in their household is used as the item corresponding to the card
ownership construct. And whether the respondents have the loyalty card of competitors
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- 26 -
programs or not will be utilized as the assessment of the competitive loyalty programs
construct.
For the household characteristics the demographic characteristics as studied by Bhatnagar
and Ratchford (2004) will be utilized plus some additional characteristics. Apart from the
household annual income as used in the referred study, the items will be copied without
further discussion. However, for this item another categorization would be used, since a
currency other than the US$ is used on Aruba. Regarding the additional items, the items
that will be added are income frequency during a month, gender of the head of household,
employment status of the head of household and number of employees in the household
having an income. The addition of the gender and employment status of the head of
household was based on the findings of Blattberg et al. (1978). The number of employees in
the household which are receiving income is incorporated to assess the likelihood of the
household to have best-offer search behavior. The income frequency during a month item
is incorporated to investigate whether there is some difference in loyalty based on
differences in this frequency.
As far as the literature review goes, no direct measures could be found for the
acculturation preference item. And based on its presumed importance in the grocery retail
industry on Aruba, it has been considered important to include it anyhow. Therefore, a
measure has been intuitively created to measure it. The measure consists of three
statements regarding acculturation by the staff of the grocery store and the scale used is a
9-point scale, ranging from completely agree to completely disagree.
Customer loyalty
Although Lin and Wang (2006) provide items that are presumed to be good to assess
customer loyalty, it is assumed that their items would not be suitable in this study, due to
the presumed multi-store loyalty. The items used by Lin and Wang are based on a single
website loyalty. Therefore, it is chosen to utilize the items as investigated in the studies of
Selin et al. (1988) and Muncy (1983) for assessing loyal attitude. The items used in both
these studies will be adapted to incorporate them into the questionnaire of this study. This
adaptation is merely the switch of XYZ airline into Kong Fui. Furthermore, Days (1969;
30) equation will be used as the basis for this studys investigation of loyalty. Respectively,
it is tried to assess both behavioral and attitudinal loyalty, since Dick and Basu (1994)
suggested that true costumer loyalty requires the assessment of both behavioral- and
attitudinal loyalty. Another measure of loyalty to be used is word-of-mouth. The items
used to measure word-of-mouth are the items used by Baumann, Burton and Elliott
(2005). They studied the determinants of customer loyalty and share of wallet in retail
banking in Australia. In that study share of wallet was assessed by intentions to
recommend (i.e. word-of-mouth), as well as self-stated short-and long-term intentions to
remain a customer of the bank. The items measuring word-of-mouth will be incorporated
in this survey with minor changes to them. However, it should be noted that the scale used
in the study of Baumann, Burton and Elliott (2005) is not stated in the report. Therefore,
Customer loyalty
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- 27 -
in this study a suitable scale will be utilized independent of the scale of Baumann, Burton
and Elliott (2005). Furthermore, Reichheld (2003) looked for a single question, which
assesses consumers loyalty to a company. Thereby he did a research linking survey
responses with actual consumer behavior and ultimately with company growth. This study
provided the author with that single survey question useful to predict growth. That
particular question came out to be about customers willingness to recommend a service or
product to someone else. There appeared to be a direct correlation between customers
enthusiasm to refer a friend or colleague and the differences in growth rates among
competitors in most of the investigated industries. Therefore, the customers willingness to
recommend Kong Fui to someone else would be incorporated in this research as well.
The measures for the construct assessing enjoyment of the loyalty program are
investigated with the items as used in the study of Leenheer (2004). These items will be
incorporated into the survey related to this study without further discussion.
Idiosyncratic fit
The idiosyncrasy construct will be assessed by a single item. This item is based on the
relevance element (OBrien and Jones, 1995). In this regards, the customer will be asked to
rate the statement I consider the extent to which rewards are achievable with the loyalty
program of Kong Fui is very important. The rating uses a 7-point scale with 1= completely
disagree to 7= completely agree.
Loyalty program design will be based on the modified framework of reward schemes of Yi
and Jeon (2003). It will be tried to evaluate the preference of customers with regard to the
timing of the reward and the type of the reward. These preferences will be translated into
the items I prefer a direct reward for my participation in a loyalty program and I prefer
a delayed reward for my participation in a loyalty program. Additionally, consumers
thoughts about membership fees for loyalty programs will be assessed. This will be
measured by the item I do not like to pay fees to participate in a loyalty program. This
item was incorporated due to the existence of a loyalty program on Aruba, where the
consumers are obliged to pay a fee to participate in the program. Subsequently, it was
chosen to use a 5-point scale ranging from strongly disagree to strongly agree to measure
the construct.
The measures concerning the customer characteristics construct have been
discussed above already.
Privacy concerns
Just as the measure for loyalty program adoption, the measure for privacy concerns is
adopted from Leenheer (2004).
Antecedents of loyalty program adoption
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- 28 -
3.1.2 Questionnaire
The compilation of the measures as discussion previously leads to the construction of the
questionnaire
7
to be used in this study. The questionnaire consists of several questions
concerning both the antecedents of customer loyalty and the antecedents of loyalty
program adoption. In appendix 1
8
(tables A-1 through A-3) an overview is given of the
questions that were used in the questionnaire including the constructs that these
questions are supposed to measure. Some questions form multi-item constructs.
Section B encompasses the questions related to household characteristics
9
. This section
includes questions covering the number of household members, frequency of income-inflow
in the household, gender of the head of the household, employment status of head of
household, street name and number of household members receiving some sort of income.
Finally, the general socio-demographic questions
9
are listed in section C. This section
includes questions related to the gender, age category, educational level, marital status
and households monthly-income category of the respondents. It is important to present
these specific questions thoroughly, due to the reason that the answers to these questions
are used to investigate possible similarities or differences between different groups under
the respondents. These variables will therefore be mainly important for the chi-squared
tests.
All questions of section A except questions 1, 2, 5, 6 and 7 were ordinal variables and had
to be answered with a Likert-scale. These Likert-scales varied from 5-point, 7-point and 9-
point scales. Both questions 5 and 6 had a 10-point scale. Finally, questions 1, 2 and 7
were nominal variables. Concerning section B of the survey, both questions 1 and 5 were
ratio variables. Questions 2 through 4 were nominal variables as were all the questions of
section C.
3 . 2 S a m p l e a n d d a t a c o l l e c t i o n
This section covers the sample and data collection method as planned prior to the
investigation. Regarding the population of the study, it consisted of both male and female
supermarket shoppers (18 and above) on Aruba, specifically at Kong Fui Supermarket.
The potential respondents were approached when visiting Kong Fui for their grocery
purchases at the entrance of the supermarket.
The model for modeling customer loyalty depends on three aspects, namely:

7
This questionnaire is displayed in the appendices (appendix 2 in English and appendix 3 in Papiamento).
8
Note that the tables whose numbers start with an A are depicted in appendix 1
9
Note that in this study both household characteristics and socio-demographic characteristics are represented
by the term customer characteristics.
- Type of loyalty measure: here self-reported behavior is used.
- Available data: due to the magnitude of the databank of this company, the
data were not readily available to be analyzed.
- Longitudinal nature of data: this study has a static nature.
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- 29 -
Data will be collected through a mall intercept survey since that method had been used by
previous research (see for instance, Reynolds et al. 2002; Babin and Darden, 1996). During
the survey no distinction will be made between members and non-members. Consequently,
both groups of shoppers will be approached to collaborate with the study. It will be only in
the analysis that the members and non-members will be separated to see whether there
are differences between these two groups of customers, thereby assessing the influence of
card ownership.
Regarding the data collection period, it will cover one weekend and some week-days of the
subsequent week. To be specific, with weekends it is referred to both Friday and Saturday
both before and after the afternoon (opening hours) and on Sunday only before the
afternoon due to opening hours restrictions. Thereby the chance of getting consumers with
different shopping frequencies to participate in the survey is expected to be greater. This
selection was made based on the flow of shoppers during the weekends at the
supermarket. Specifically, the weekend will be the last weekend of the month, since during
that weekend a larger flow of consumers is expected.
Regarding these different shopping frequencies a distinction will be made between
monthly, bi-monthly and weekly shoppers. This distinction is thought to be important for
the analysis as well, since there is expected to be some difference between the degree of
store patronage between especially monthly shoppers and weekly shoppers. Since the
weekly shoppers are supposed to buy less during each visit, it is assumed that their degree
of store patronage would be significantly different from at least the monthly shoppers.
Furthermore, week-days were chosen as well, since there are possibly difference in
purchase behavior and/or loyalty between customers visiting the supermarket during
week-days and those during weekends.
The sample will be performed at the end of June 2006. The specific dates of the sample
were originally set to be from Saturday to Thursday of the next week, at the beginning of
July 2006. Thereby, responses could be compiled of customers shopping both in the
weekend and those shopping during the week-days. The daytime on which the sample was
compiled was differentiated between the days as well, to minimize possible biases, caused
by the part of day and day on which the grocery shopping takes place, in the data possible.
For the coverage of the representativity of the sample refer to the following chapter.
3 . 3 A n a l y t i c a l m e t h o d
Different analytical methods will be applied in order to come up to an answer to the
research question and the last two sub-questions, and test the hypotheses. Prior to the
application of these different analytical techniques, the general results of the survey will
be described. Thereafter, a factor analysis (including reliability tests) has to be performed
to reduce the number of items, due to the multi-item character of the questionnaire for
some of the constructs.
Factor analysis provides the tools for analyzing the structure of the interrelationships
(correlations) among a large number of variables, in this case questionnaire responses, by
defining sets of variables that are highly interrelated (Hair et al., 2006). These sets of
highly interrelated variables are then specified as factors. They are assumed to represent
dimensions within the data. The concern here is to reduce the number of variables.
Thereby, the dimensions can guide in creating new composite measures. These composite
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- 30 -
measures represent the constructs in the conceptual model, which were assessed by
multiple items in the survey.
Prior to performing the factor analyses, some important decisions had been made
regarding missing data. In this regard, two questions concerning missing data, to address
any problems it may create (Hair et al., 2006), were answered:
1. Is the missing data sufficient and non-random so as to cause problems in
estimation or interpretation?
2. If missing data must be remedied, what is the best approach?
Most notably, missing data must always be addressed if the missing data are in a non-
random pattern or more than 10 percent of the data items are missing (Hair et al, 2006).
There are three basic methods available for solving the missing data problem: the
complete case approach (known as listwise deletion), the all-variable approach (known as
pairwise deletion) and model-based imputation techniques. Although listwise deletion has
been considered most appropriate for structural equation modeling (SEM) traditionally,
pairwise deletion has been applied more recently. Pairwise deletion allows the use of more
data. However, both of these procedures can produce problems (Allison 2003 in Hair et al,
2006). Still when the missing data are random, less than 10 percent of observations, and
the factor loadings are relatively high (.7 or greater), any of these approaches can be
expected to provide good results (Enders and Bandalos, 2001).
The pairwise approach appears to be a good solution for the missing data problem when
the sample sizes exceed 250 and the total amount of missing data involved among the
measured variables is below 10 percent. Conversely, the model-based approaches become
superior when samples are small and when the amount of missing data becomes large.
However, conclusions drawn from any sample that contains large amounts of missing data
should be handled cautiously (Hair et al, 2006). Therefore and due to the relatively small
differences between the results of these three different approaches regarding the influence
of the missing data in this sample, it was chosen to follow the model-based approach. In
this regard, the approach of replacing the missing data with the mean of these variables
was selected since this was the other approach available in SPSS, besides the pairwise and
the listwise approaches. As mentioned previously, factor analyses were performed on the
multi-item questions to reduce the number of variables.
However, prior to assessing the factors, it has to be checked whether it is favorable to
perform a factor analysis on these items. This check will be performed by the KMO-test
and Bartlett's Test of Sphericity. After checking whether the application of factor analysis
on these items is supported, a decision has been made regarding the number of factors to
be retained. According to Hair et al. (2006), this decision can be based on different
considerations. However, in this study it was chosen to base the number of factors to be
retained on two considerations out of the list of Hair et al. (2006). The maintained
considerations are:
1. factors with eigenvalues greater than 1.0, and
2. enough factors to meet a minimum of 60% of variance explained
After coming up to the factors and labeling them, a reliability test is performed to test the
internal consistency of the items belonging to each separate factor. Hereby the lower limit
for Cronbachs Alpha being .60 was kept, as suggested by Hair et al. (2006).
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- 31 -
Thereafter, the application of the main tests could start. First, the influence of the
different customer characteristics variables on customer loyalty and the adoption of
loyalty programs will be studied. The influences of the other antecedents studied besides
the customer characteristics measures were assessed in similar ways. However, due to
the similarity these results as depicted in appendix 1 will not be explicitly discussed in
this report
10
. To assess each of these influences a distinction is made between two
independent samples tests and more independent samples tests, depending on the
customer characteristic under consideration. Besides this division into two classes there is
a division into three types of tests depending on the type of dependent variable
investigated. Figure 3.1 illustrates the different types of the dependent variables that are
investigated in these tests.
Figure 3.1: Overview of studied influence of customer characteristics
Two independent samples tests
11
Regarding the two independent samples tests a distinction is made between Chi-square
test, the Mann-Whitney test and the Student t-test. It depends on the dependent variables
which of these three tests is the appropriate one. The Chi-square test is used with nominal
dependent variables, whereas the Mann-Whitney test is used when dealing with ordinal
dependent variables. Finally, the students t-test is used when dealing with interval/ratio
scaled variables (De Vocht, 2000). Since this study deals with each one of these types of
variables, as can be seen in figure 3.1, each of these three different tests would have to be
performed.

10
For the results of these tests refer to appendix 1 tables A-22 through A-25
11
For further details about these techniques refer to De Vocht, 2000, Hair et al., 2006 or Baarda and De Goede,
2001
Adoption of the
loyalty program
Adoption of competitive
loyalty programs
Customer
Characteristics
Nominal Nominal
Behavioral loyalty
Ordinal
Attitudinal loyalty
&
Word of mouth
Interval/Ratio
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- 32 -
Chi-square test
Chi-square test is a method of analyzing data in a contingency table by comparing the
actual cell frequency to an expected cell frequency. It is a standardized measure of actual
cell frequencies compared to expected cell frequencies (De Vocht, 2000).
In this study, the Chi-square test will be used to study the influence of the binary
customer characteristics in this study on both the adoption of competitive loyalty programs
and the adoption of the loyalty program, since these are two nominal variables (see figure
3.1).
Before performing each of the Chi-square tests in this research it was checked whether
two requirements are met regarding the expected cell frequencies. These requirements
are:
1. All expected cell frequencies should be equal to or greater than 1, and
2. Maximum 20 % of the expected cell frequencies could lie between 1 and 5
Mann-Whitney U test
The Mann-Whitney U test is a non-parametric test that can be performed when not all the
requirements of a Student t-test are met (De Vocht, 2000). Instead of these requirements
the Mann-Whitney U test requires only an ordinal measuring scale. The null-hypotheses,
that two samples originate from identical populations thus that the distributions are
identical are tested by the Mann-Whitney test. Here, the Mann-Whitney U test will be
used to uncover the influence of the binary customer characteristics in this study on
behavioral loyalty, since behavioral loyalty was measured by an ordinal variable.
Student t-test
The t-test for two independent samples tests whether the means of an interval- or ratio
variable in two groups (populations) are the same. The t-test includes the Levenes test for
Equality of variances. The null-hypothesis of the Levenes test states that the variances of
both populations are the same (o1
2
=o2
2
). If the null-hypothesis is not rejected the Equal
variances assumed should be used, otherwise the Equal variances not assumed (De Vocht,
2000). Here this test will be used to discover the influence of the binary customer
characteristics in this study on word-of-mouth and attitudinal loyalty, since these are
interval/ratio variables.
More independent samples tests
11
When dealing with more independent samples tests a distinction could be made between
Chi-square test, Kruskal-Wallis test and the analysis of variances (ANOVA). It depends on
the dependent variables which of these three tests is most appropriate. The Chi-square
test is used with nominal dependent variables, whereas the Kruskal-Wallis test is used
when dealing with ordinal dependent variables. Finally, ANOVA is used when dealing
with interval/ratio scaled variables (De Vocht, 2000). As was the case with the two
independent samples tests the character of the variables as illustrated in figure 3.1
make the utility of each of these three tests necessary.
Since the technique essence of Chi-square tests was extensively covered earlier, it will not
be discussed here.
- 33 -
- 33 -
Kruskal-Wallis test
As the Mann-Whitney U test, the Kruskal-Wallis test is a non-parametric variance
analysis. Hereby it is solely required that the dependent variable is measured on an
ordinal scale. With this test, the null-hypothesis that the samples originate from identical
populations thus the distributions are equal is tested for more than two samples
(groups). Here the Kruskal-Wallis test will be used to assess the influence of different
customer characteristics on behavioral loyalty, since behavioral loyalty is an ordinal
variable.
Analysis of variance
Variance analysis (ANOVA) is a technique to test the equality of the means of different
interval- or ratio-scales. ANOVA is used to determine the probability that differences in
means across several groups are due solely to sampling error. Because the mean squares
between groups (MSB) are inflated by differences between the groups, large values of the
F-statistic lead to rejection of the null-hypothesis (
0
H ), which states that there is no
difference in means across groups (Hair et al, 2006 and Baarda and De Goede, 2001).
The groups are differentiated by an independent nominal (or ordinal) variable that is
named the factor-variable. Accordingly, the F-statistic does not address the question of
which means are different, even though it assesses the null-hypothesis of equal means
(Hair et al., 2006). To assess these differences Hair et al (2006) suggest the use of either
planned comparisons or post hoc tests. However, this investigation is limited to the
assessment of equal means.
The null-hypothesis in variance analysis is always that the population means of all (k)
groups are the same; 1 = 2 = 3 = . k. Variance analysis is based on the variation in the
sample data. Variation refers to the squared deviation of all observations from the mean
(Sum of Squares). The variance is obtained by dividing the variation by the degrees of
freedom (De Vocht, 2000).
In variance analysis the total variance is split into two components, namely the within
groups variance and the between groups variance. The testing is based on the F-test. The
F-value is calculated by dividing the between groups variance by the within groups
variance. When there is a great amount of between groups variance, the majority of the
spread would be caused by differences between the groups; then the F-value is (clearly)
greater than 1.
The null-hypothesis that the population means of all groups are equal is rejected or not
through the assessment of the significance level ( . Sig ). Hereby, the significance value has
to be greater than 0.05 in order not to reject the null-hypothesis. Consequently, if the
significance is smaller than the required 0.05, the null-hypothesis can be rejected with a
reliability of 95% ( 05 . 0 . < Sig ).
Variables transformation
In order to take the customer characteristics variables into the multiple regressions, some
had to be transformed into variables with only two options, where after they had to be
recoded into dummy variables. The transformed variables
12
include:

12
Note that the list here will include the abbreviations for the variables as listed in table A-3 in the appendix 1.
- 34 -
- 34 -
Additionally, the variables gender and head of HH were only recoded. The binary coding of
these variables was changed from a 1-2 code into a 0-1 code as necessary for a dummy
variable (De Vocht, 2000).
Income frequency
Prior to transforming the variable income frequency an analysis of variance was
performed to see whether frequency of income inflow has some effect on attitudinal loyalty
and/or word-of-mouth. The results of these analyses illustrated that there is no significant
difference between the different frequencies of income inflow. Therefore, the choice has
been made arbitrary to make a distinction between weekly inflows on the one hand and
both bi-weekly and monthly inflows on the other hand.
Education
Regarding educational level, the two options encompassing an educational level below
college degree have been reduced to one group and the three options above high school
have been combined into one group. This distinction was also based on the assumption
that people with an educational level above high school would have considerably more
disposable income than those with a maximum of high school education.
Marital status
The three studied categories of marital status were reduced to two categories based on the
assumption that singles would have a different degree of loyalty compared to those people
who either have a partner or are married. Thereby the responses of this variable were
divided into those of singles and those of the people who are not singles.
Age
In order to transform the age category into a dummy variable an analysis of variance was
performed, thereby assessing the relation between the age categories and the level of
customer satisfaction. The results of that test are displayed in table A-5 in appendix 1.
Due to the low frequencies for some age categories the decision was made to maintain a
lower confidence level in the analysis of variance. With 91% confidence it can be concluded
that the population means of the age categories do differ based on the significance level
( . Sig ). Therefore, the variable was arbitrarily split into two groups. The binary groups
which will be held for age category are under 25 years and 25-35 years forming one group
and the other three categories forming the other group.
Employment
Regarding the employment status of the head of the household, again an analysis of
variance was performed, thereby addressing the relation between employment status and
the level of customer satisfaction. The results are depicted in table A-5. The population
- Income frequency
- Education
- Marital status
- Age
- Employment
- Gross income
- 35 -
- 35 -
means of the employment status of head of household appear to differ at the 99%
confidence level. Consequently, the variable was arbitrarily split into two groups, where
the households with an unemployed head of household and those where the head is retired
were grouped into one group. Thereby the assumption maintained was that both these
groups would have less disposable income than in situations where the head of the
household is employed.
Gross income
Finally, the four studied categories of monthly-income were also reduced to two. In this
reduction those with a monthly-income below modal were kept apart and all the other
categories were grouped together.
Additionally, adoption of loyalty programs and behavioral loyalty both ordinal scales
were transformed into dichotomous variables, thereby making the performance of a logistic
regression analysis possible. These transformations were necessary in order to be able to
assess the effect of the antecedents of loyalty on behavioral loyalty as measured by
repeat purchases and the effect of the antecedents of loyalty program adoption on the
adoption of the loyalty program of Kong Fui.
Similarly, each of the other antecedents of customer loyalty and loyalty program adoption
were recoded into binary variables based on their medians in order to access their non-
linear influence on either customer loyalty or loyalty program adoption respectively.
Regression analysis
The analysis concludes with the application of different regression analyses to evaluate the
effects of the antecedents of customer loyalty and those of loyalty program adoption.
Hereby, a distinction was made between dichotomous dependent variables and
interval/ratio-scaled dependent variables. This distinction made the application of both
linear regression analysis and logistic regression analysis necessary. Furthermore, the
effect of these antecedents will be assessed through single regression analysis as well as
multiple regressions. Consequently, the effect of each antecedent will be assessed
independently
13
(single regression analysis) as well as when all the potential predictors are
combined in the multiple regression, whereby the influence of all the other independent
variables are controlled for (see De Vocht, 2000).
Linear regression analysis
The statistical test of the regression coefficients and the constant is to ensure the
estimated parameters would be different from zero within a specified level of acceptable
error. Although not a test of validity, this test determines whether the impacts represented
by the coefficients are generalizable to other samples from the customers of Kong Fui
being the population under investigation. However, it should not be forgotten that the
coefficients can vary quite remarkably from sample to sample. It is this variation that
leads to the need to validate any regression analysis on a different sample (s). But that
validation lies outside the scope of this particular research.
In interpreting the regression variates attention was given to the assessment of
multicollinearity, which is labeled as a key issue by Hair et al. (2006). Multicollinearity

- 36 -
- 36 -
refers to the correlation among the independent variables. Although the ideal situation
would be to have a number of independent variables highly correlated with the dependent
variable and with little correlation among themselves, this is hardly ever the case. In most
situations, particularly when dealing with consumer response data, some degree of
multicollinearity is unavoidable.
The simplest and most obvious way to identify collinearity is by examining the correlation
matrix for the independent variables. Thereby, the . Sig (2-tailed) value would be used to
determine whether the different correlations are significant. The null-hypotheses thereby
are that the correlation coefficients are zero (or close enough to be taken as zero). These
null-hypotheses will be rejected at the 5% level if the significance values are less than 0.05.
The presence of high correlations (generally .90 and higher) is the first indication of
substantial collinearity (Hair et al. 2006). De Vocht (2000) suggests leaving one of any
couple of variables that have a correlation of 9 . 0 | | > r out from the model. A measure
expressing the degree to which each independent variable is explained by the set of other
independent variables is needed in order to assess multicollinearity. Note hereby that
multicollinearity is the collinearity that may be due to the combined effect of two or more
other independent variables. Tolerance and its inverse being the variance inflation factor
(VIF) are the two most common measures used for assessing both pairwise and multiple-
variable collinearity.
Tolerance is a direct measure of multicollinearity. It is defined as the amount of variability
of the selected independent variable not explained by the other independent variables. The
tolerance value should be high, which means a small degree of multicollinearity, i.e. the
other independent variables do not collectively have any substantial amount of shared
variance. A common cutoff threshold is a tolerance value of .10 (Hair et al. 2006). VIF, on
the other hand, is calculated simply as the inverse of the tolerance value. Consequently,
instances of higher degrees of multicollinearity are reflected in lower tolerance values and
higher VIF values.
The VIF translates the tolerance value into an impact on the estimation process. As the
standard error is increased, it makes the confidence intervals around the estimated
coefficients larger, thus making it harder to demonstrate that the coefficient is
significantly different from zero (Hair et al. 2006).
Generally, the tasks which should be performed in this regard include:
However, in this investigation the task is limited to the assessment of the degree of
multicollinearity. The determination of the impact of multicollinearity on the results and
the application of the necessary remedies are both suggested to be incorporated in further
research.
Logistic regression analysis
According to Hair et al. (2006), logistic regression tests hypotheses about individual
coefficients just as it is done in multiple regression analysis. Hereby, a statistical test is
used to see whether the logistic coefficient is different from 0. However, it should not be
- assessment of the degree of multicollinearity,
- determination of its impact on the results, and
- application of the necessary remedies if needed
(Hair et al. 2006)
- 37 -
- 37 -
forgotten that in this case a value of 0 corresponds to the odds of 1.00 or a probability of
.50. This .50 indicates that the probability is equal for each group (i.e. again no effect of the
independent variable on predicting group membership).
Furthermore, here the Wald statistic is used to assess the significance of the different
coefficients individually. This statistic provides the statistical significance for each
estimated coefficient so that hypothesis testing can occur just as in multiple regression
analysis. Consequently, a statistically significant logistic coefficient can be interpreted in
terms of how it impacts the estimated probability and thus the prediction of group
membership (Hair et al., 2006).
Concerning model estimation fit, the basic measure of how well the maximum likelihood
estimation procedure fits is the likelihood value ( 2LL - value). A perfect fit correspondents
to a 2LL - value equal to 0. Consequently, a lower 2LL - value corresponds to a better
model fit. The chi-square test and the associated test for statistical significance are used to
evaluate the reduction in the log likelihood value (for further details refer to Hair et al.,
2006). The measure that will be used to assess overall model fit is the Nagelkerke
2
R , since
the usage of the Cox and Snell
2
R is excluded, due to its limitation that it can not reach
the maximum value of 1. Conversely, the Nagelkerke
2
R has a range of 0 to 1. Still, both of
these measures reflect the amount of variation accounted for by the logistic model,
whereby 1.0 indicates a perfect model fit (Hair et al., 2006).
- 38 -
- 38 -
CHAPTER 4: RESEARCH RESULTS
As already stated in the previous chapter, this chapter covers the results of the consumer
survey. The chapter starts with the assessment of the representativity of the sample. Next,
it covers the general findings of the survey. And these general findings will give way to the
more specific analysis and results.
4 . 1 R e p r e s e n t a t i v i t y o f s a m p l e
The target group of Kong Fui supermarket consists of consumers of all ages.
However, here the decision was made to concentrate on consumers of 20 years of
age and above. This decision was made, since it is assumed in this study that Arubans
younger than 20 years generally are still living with their parents and are therefore not
independent grocery shoppers. Thereby, as can be seen in table 4.1, there is only a small
proportion of respondents in the age category below 25 years as is also the case with the
age category of 55 years and above. This is quite understandable, since a substantial
proportion of the people below 25 years are either still living with their parents or studying
abroad. On the other hand, the people of 55 years or older are possibly helped by their
family members with the purchase of groceries.
Table 4.1: Sample proportions based on age category
Age categories Sample proportions
Under 25 years 1,3 %
25 to 34 years 21,6 %
35 to 44 years 46,4 %
45 to 54 years 25,5 %
55 years and above 5,2 %
Furthermore, it is assumed that the big majority of these consumers would be females,
either shopping on their own or accompanied by their husbands or partners. Therefore, it
is not surprising that almost 87 per cent of the sample was females (see table 4.2).
Table 4.2: Sample proportions based on gender
Gender Sample proportions
Female 86,9 %
Male 13,1 %
Finally, table 4.3 depicts that the single-member households and households with more
than 5 members in this sample are remarkably fewer than the other sizes of households.
But a similar distribution appeared to exist under the customers of Kong Fui. The single
households and those with over five members are relatively underrepresented in the
customer base.
However, an analysis of variance for the different household sizes against the measures of
customer satisfaction towards Kong Fui shows that there are no significant differences
based on household size. Therefore, and based on both age categories and gender it can be
concluded that this sample is a good representation of the population, being the public
shopping for groceries at Kong Fui.
- 39 -
- 39 -
Table 4.3: Sample proportions based on number of household
members
Number of household members Sample proportions
1 6,5 %
2 24,2 %
3 24,8 %
4 24,8 %
5 14,4 %
6 4,6 %
9 0,7 %
4 . 2 G e n e r a l f i n d i n g s
This paragraph shows the general findings of the empirical research. Thereby, some basic
descriptive statistics
14
are provided as a first illustration of the data that will be analyzed
thereafter.
4.2.1 Basic descriptive statistics for customer loyalty predictors
Table 4.4 shows the distribution of the importance of each item measuring shopper
characteristics. It is illustrated that the majority of the respondents (72.5%) completely
agree with the statement I choose to shop at the grocery store that has the best deals at
the time. Subsequently, a total of 79.8% of the respondents agree with the statement in
some degree. Conversely, only 8.0% (5.3% + .7% + 1.3% + .7%) of the respondents appear to
be against this statement.
Similarly, it is depicted that a vast 63.6% of the respondents completely agree with the
statement I compare what I get for my money in different stores. Furthermore, a total of
77.5% of the respondents do agree with the statement in some degree. On the contrary,
only 13.9% appear to be in disagreement with the statement.
Regarding the statement You profit from comparing prices across stores, the percentage
of respondents, who completely agree with it is relatively lower, as compared with the two
previous statements. However, still a majority of 51.0% stated to be in complete agreement
with this statement. When all the levels of agreement are grouped, this adds up to a great
66.2% of the respondents. On the other hand, a summation of the levels of disagreement
with this statement, adds up to 17.2% of the respondents. However, what is presumed
worth mentioning is that this statement has a greater percentage of respondents that are
completely in disagreement with it (13.9%).
There are 66.7% of respondents that completely agree with the statement I choose what
store to go to on the basis of where I find what I need for the best prices. Conversely, there
is a total of 10.6% of the respondents that have some degree of disagreement with the
statement. Still, this percentage is irrelevant as compared with the great 81.8% of
respondents, who support the statement.

14
Note that the responses to most of the questions are depicted in the corresponding tables in more details per
category. However, to keep the coverage short the necessary groupings of categories were done in the text
- 40 -
- 40 -
A vast majority of the respondents (65.8%) completely agree with the statement I think
personal contact with store personnel is important. Subsequently, an extremely high total
of 90.8% of the respondents agree with the statement in some degree. Conversely, a mere
2.7% of the respondents appear to be against this statement.
It is also shown that a great 52.0% of the respondents completely agree with the statement
I think it is important to be recognized by the store's personnel. In addition, an absolute
majority totaling 84.8% of the respondents do agree with the statement in some degree. On
the other hand, only 4.0% appear to be in disagreement with the statement.
Table 4.4: Descriptive statistics of shopper characteristics
items
C
o
m
p
l
e
t
e
l
y

d
i
s
a
g
r
e
e
D
i
s
a
g
r
e
e

-
-
-
D
i
s
a
g
r
e
e

-
-
D
i
s
a
g
r
e
e

-
N
e
i
t
h
e
r

d
i
s
a
g
r
e
e
,

n
o
r

a
g
r
e
e
A
g
r
e
e

+
A
g
r
e
e

+
+
A
g
r
e
e

+
+
+
C
o
m
p
l
e
t
e
l
y

a
g
r
e
e
N

(
t
o
t
a
l

r
e
s
p
o
n
s
e
s
)
I choose to shop at the grocery
store that has the best deals
at the time
5.3 .7 1.3 .7 11.8 2.0 2.0 3.3 72.5 152
I compare what I get for my
money in different stores
9.9 1.3 .7 2.0 8.6 2.6 4.0 7.3 63.6 151
You profit from comparing
prices across stores
13.9 1.3 .7 1.3 16.6 2.6 6.0 6.6 51.0 151
I choose what store to go to on
the basis of where I find what
I need for the best prices
8.5 .7 .7 .7 7.8 2.0 4.6 8.5 66.7 153
I think personal contact with
store personnel is important
2.0 - - .7 6.6 2.6 9.2 13.2 65.8 152
I think it is important to be
recognized by the store's
personnel
2.6 - .7 .7 11.2 2.6 13.8 16.4 52.0 152
I only shop in stores where I
know the staff is friendly
.7 - - .7 9.9 2.0 5.3 11.8 69.7 152
I think it is important there
are staff members to talk to in
the store in which I shop
2.6 - 1.3 1.3 8.5 .7 6.5 19.0 60.1 153
I want to spend as little effort
as possible on grocery
shopping
5.3 1.3 - 1.3 9.9 1.3 4.6 17.9 58.3 151
I think grocery shopping is a
necessary evil
23.0 2.0 - .7 10.8 .7 2.7 8.1 52.0 148
I enjoy shopping for groceries 5.3 3.3 1.3 .7 6.0 1.3 4.7 12.7 64.7 150
I spend as little time as
possible on grocery shopping
6.8 2.0 .7 1.4 14.3 3.4 4.1 12.2 55.1 147
- 41 -
- 41 -
Regarding the statement I only shop in stores where I know the staff is friendly, as much
as 69.7% of the respondents are in complete agreement with it. Summing all the levels of
agreement up, adds to a grand total of 88.8% of the respondents agreeing with this
statement. Conversely, a summation of the levels of disagreement with this statement,
adds up to an almost irrelevant 1.4% of the respondents.
There are 60.1% of respondents that completely agree with the statement I think it is
important there are staff members to talk to in the store in which I shop. Conversely,
there is a total of 5.2% of the respondents that have some degree of disagreement with the
statement. However, this percentage is irrelevant as compared with the great 86.3% of
respondents who said to be in agreement with the statement.
As much as 58.3% of the respondents completely agree with the statement I want to
spend as little effort as possible on grocery shopping. Subsequently, a total of 82.1% of the
respondents agree with the statement in some degree. Conversely, a relatively small 7.9%
of the respondents appear to have a differing opinion.
Then, it can be noticed that a great 52.0% of the respondents completely agree with the
statement I think grocery shopping is a necessary evil. Additionally, 11.5% of the
respondents have some degree of agreement with the statement adding up to a total of
63.5% of the respondents, who are supportive of this statement. On the contrary, a slight
high 25.7% of the respondents appear to be in disagreement with the statement.
Regarding the statement I enjoy shopping for groceries, there is a great majority of
64.7% of the respondents, who are in complete agreement with this statement. The
addition of the other levels of agreement adds up to a total of 83.4% of the respondents
supporting this statement. Still, there are 10.6% of the respondents, who have a different
opinion in this regard.
Finally, there are 55.1% of the respondents that completely agree with the statement I
spend as little time as possible on grocery shopping. Conversely, there is a total of 10.9%
of the respondents that have some degree of disagreement with the statement. However,
this percentage is irrelevant as compared with the 74.8% of the respondents, who agree
with the statement.
As is illustrated implicitly in table 4.4 and explicitly in table A-6, the items related to the
personalizing shopping motivation of Mgi (2003) have the strongest negatively skewed
distributions. Each of the four items belonging to that shopping motivation has more than
84 percent of the respondents rating them as important shopping motivators; rates 6 or
higher. Of the items belonging to the other two shopping motives, the same can not be
said. These motives have some items that give the impression to be less important as
motivators for the respondents. The respondents seem to consider the personalizing
shopping motivation-items relatively more important than the items belonging to the other
two shopping motivations of Mgi (2003). This impression is supported by the fact that
three of the items related to the personal interaction between the personnel and the
shopper have the top three means.
Shopping motivation
A vast 66.2% of the respondents completely agree to enjoy shopping for groceries (see table
4.5). Further analysis shows that an even greater 78.1% of the respondents appear to enjoy
shopping for groceries. On the contrary, a relatively small proportion equaling 13.9% of the
respondents do not enjoy shopping for groceries.
- 42 -
- 42 -
Furthermore, 67.3% and 33.6% of the respondents completely agree that they feel thrilled
to shop for groceries and that they feel freed from domestic chores when shopping for
groceries respectively. Further analysis illustrates that a bigger 80% of the respondents
feel some degree of thrill to shopping for groceries. Additionally, it can be observed that
59.8% of the respondents feel that in some way they are freed from domestic chores when
shopping for groceries. Still, this percentage is relatively small compared with the
percentage of respondents either enjoying shopping for groceries or feeling thrilled to shop
for groceries. But this low percentage appear to be the consequence of a relatively high
21.5% of the respondents having no clear opinion concerning the feeling of being freed from
domestic chores when shopping for groceries. Conversely, the percentages of respondents
not feeling thrilled to shop for groceries and not felling freed from domestic chores when
shopping for groceries are respectively 14.0% and 18.8%.
Finally, there are 78.1% of the respondents who go grocery shopping exclusively to get the
groceries they need. These are the ones, who go grocery shopping out of a utilitarian
motive. Of these a relatively big 56.3% are in complete agreement that they go grocery
shopping for that exclusiveness. However, there are still 13.2% of the respondents who do
not share this exclusiveness.
Table 4.5: Descriptive statistics related to the shopping
motivation items
F
r
e
q
u
e
n
c
y
P
e
r
c
e
n
t
F
r
e
q
u
e
n
c
y
P
e
r
c
e
n
t
F
r
e
q
u
e
n
c
y
P
e
r
c
e
n
t
F
r
e
q
u
e
n
c
y
P
e
r
c
e
n
t
Completely disagree 11 7.3 11 7.3 17 11.4 12 7.9
Disagree
---
8 5.3 7 4.7 9 6.0 2 1.3
Disagree
--
2 1.3 - - 1 .7 3 2.0
Disagree
-
- - 3 2.0 1 .7 3 2.0
Neither disagree,
nor agree
12 7.9 9 6.0 32 21.5 13 8.6
Agree
+
3 2.0 3 2.0 9 6.0 7 4.6
Agree
++
7 4.6 4 2.7 11 7.4 7 4.6
Agree
+++
8 5.3 12 8.0 19 12.8 19 12.6
Completely agree
I

e
n
j
o
y

s
h
o
p
p
i
n
g

f
o
r

g
r
o
c
e
r
i
e
s
100 66.2
I

f
e
e
l

t
h
r
i
l
l
e
d

t
o

s
h
o
p

f
o
r

g
r
o
c
e
r
i
e
s
101 67.3
I

f
e
e
l

f
r
e
e
d

f
r
o
m

d
o
m
e
s
t
i
c

c
h
o
r
e
s

w
h
e
n

s
h
o
p
p
i
n
g

f
o
r

g
r
o
c
e
r
i
e
s
50 33.6
I

g
o

g
r
o
c
e
r
y

s
h
o
p
p
i
n
g

e
x
c
l
u
s
i
v
e
l
y

t
o

g
e
t

t
h
e

g
r
o
c
e
r
i
e
s

I

n
e
e
d
85 56.3
Customer Satisfaction
Concerning customer satisfaction towards Kong Fui, there are a great 73.2% of the
respondents, who are satisfied with the supermarket (see table 4.6). Besides, there are still
13.1% more that are very satisfied with the supermarket. However, there appears to be
13.1% of the respondents also that do not have a clear-cut opinion regarding their
- 43 -
- 43 -
satisfaction with Kong Fui. Still, it is important to note that a mere .7% of the respondents
reported to be very dissatisfied with the supermarket.
Table 4.6: Descriptive statistics of the 5-point scale customer
satisfaction measure
How satisfied are you with Kong Fui supermarket?
Frequency Percent
Very dissatisfied 1 .7
Dissatisfied - -
Neither dissatisfied, nor satisfied 20 13.1
Satisfied 112 73.2
Very satisfied 20 13.1
Table 4.7 illustrates that Kong Fui matches the expectations of the absolute majority of
the respondents (92.7%). Conversely, the supermarket does not meet the expectations of
only 7.2% of the respondents. However, further analysis shows that although the
supermarket meets the expectations of the absolute majority of the respondents there is
still some room for improvement. This can be concluded when taking a closer look at the
scores. Only 5.2% of the respondents gave the supermarket the absolute score. Next, there
were a relatively low 17.6% of them who gave the supermarket a 9. However, the
responses were more concentrated on the scores of 8 (34.6%) and 7 (26.8%).
Furthermore, the closeness of Kong Fui towards the ideal supermarket according to the
respondents has a distribution quite similar to the ability of Kong Fui to match the
expectations of the respondents. Still, the scores 7 and 8, 24.2% and 26.1% respectively are
most frequently given by the respondents. Thus, although the great majority of the
respondents (90.2%) picture Kong Fui as being close to their ideal supermarket, there is
still room for improvement to get the supermarket there. Still it is remarkable that fewer
respondents reported that Kong Fui is able to match their expectations completely than
that Kong Fui is close to their ideal supermarket. This could be an indication that the
respondents do not expect their ideal supermarket to match their expectations completely
anyhow.
Table 4.7: Descriptive statistics of the 10-scale customer
satisfaction items
How well does Kong Fui supermarket match your
expectations?
How close to ideal is Kong Fui
supermarket?
Score Frequency Percent Frequency Percent
Not at all 1 3 2.0 1 .7 Not close at all
Disagree ---- 2 - - - - Far ----
Disagree --- 3 - - - - Far ---
Disagree -- 4 2 1.3 2 1.3 Far --
Disagree - 5 6 3.9 12 7.8 Far -
Agree + 6 13 8.5 22 14.4 Close +
Agree ++ 7 41 26.8 37 24.2 Close ++
Agree +++ 8 53 34.6 40 26.1 Close +++
Agree ++++ 9 27 17.6 28 18.3 Close ++++
Completely 10 8 5.2 11 7.2 Very close
- 44 -
- 44 -
Besides the overall measures of customer satisfaction, some items were assessed which
could be influential on customer satisfaction. Table 4.8 gives an overview of the responses
of these items which were measured. It is clear that the great majority (80.9%) of the
respondents value the service provided by the personnel of the fresh meat department as
satisfactory. However, most of that proportion is concentrated on the score 6. Therefore it
can be concluded that there is still for improvement assessed from the customer
perspective. Regarding the service in the cosmetics department 82.8% of the respondents
do value it as satisfactory. Here the majority of the responses are almost equally
distributed between the scores of 6 and 7. Therefore, it can be said that as compared to
respondents valuation of the service provided by the personnel of the cosmetics
department, the service in the fresh meat department is lacking.
Service provided at the check-out point, however, has a clear concentration of respondents
scoring it as very good. The majority of the respondents thus score perceive it as if there is
little or no room for improvement. Furthermore, a high 85.2% of the respondents value the
service provided at the check-out point as pleasing. Hereby, it is important to notice that
although the service in the cosmetics department appears to be better than the service in
the fresh meat department; both departments perform worse than the check-out point
service-wise.
Furthermore, the great majority (93.9%) of the respondents value the friendliness of
cashiers as adequate. Of those 77.7% (73.0/93.9) value that friendliness even as very good.
A slight 2.1% of the respondents value the friendliness of the cashiers below average. Both
service provided by baggers and overall friendliness of the associates have similar
distributions. A slight 1.3% of the respondents value the service provided by baggers below
average, whereas a slightly higher 2.1% of the respondents score the overall friendliness of
the associates below average. Conversely, the majority of the respondents score both items
above average. The service provided by baggers is even scored as very good by 68.5% of the
respondents, while 63.3% of the respondents score the overall friendliness of the associates
as very good.
Similarly, speed of check-out, overall store service and variety of the fresh vegetables and
fruit department have comparable distributions. Only 1.4% of the respondents score the
speed of check-out and the overall store service respectively below average. The variety of
the fresh vegetables and fruit department performs slightly worse with a mere 2.0% of
the respondents valuing it below average. However, the great majority of the respondents
(87.7%, 88.5% and 88.5% respectively) values speed of check-out, overall store service and
variety of the fresh vegetables and fruit department as suitable. For each of these three
items the responses concentrated on the extreme being very good. This concentration was
63.0% for speed of check-out, a slightly fewer 61.9% for overall store service and yet a
slightly fewer 59.7% for the variety of the fresh vegetables and fruit department.
The percentages of respondents, who have rated these items below average are 1.4% for
both quality of the fresh vegetables and fruit department and variety of fresh meat
items, while a slightly higher 4.1% have rated the overall store cleanliness inside as
performing poorly. On the other hand, 89.9% of the respondents rated the quality of the
fresh vegetables and fruit department as being satisfactory. The variety of fresh meat
items was rated satisfactory by 91.9% of the respondents. And relatively fewer
respondents a mere 79.9% rated the overall cleanliness of the supermarket inside of it
as suitable.
- 45 -
- 45 -
There appears to be an observable difference related to the distribution of overall store
cleanliness inside compared to the other two items. For both the other two items there is a
big difference in frequency between the modal option and the second most frequent option
(59.5% versus 20.3% and 52.0% versus 28.4%). For both this difference is that the modal
option is about two times the next. However, for overall store cleanliness inside this
difference is much smaller. Still, each of these three items has the very good option as the
modal option.
The aspects quality of the fresh meat items, availability of everyday grocery items and
overall value for your money have similar distributions of the frequencies also. Of these
three items, quality of the fresh meat items is the item which has less negative responses;
only .7% of the respondents rated it below average. Availability of everyday grocery items
performs slightly worse with 1.4% of the respondents rating it as unsatisfactory. At last,
overall value for your money performs yet slightly worse with 3.4% of the respondents,
who believe it is below average.
Conversely, 91.1% of the respondents believe that the quality of the fresh meat items at
Kong Fui is above average. It was even rated as very good by 55.1% of the respondents. A
slightly higher percentage of the respondents (91.7%) believe that the availability of
everyday grocery items at Kong Fui is better than average. A high 61.6% of the
respondents even think that Kong Fui performs very well on this item. Last, the overall
value for money perception at Kong Fui performs slightly worse as compared as compared
to the other two items in table 4.15. A slightly lower percentage of the respondents (87.8%)
value this item as being above average for Kong Fui. However, a pretty high 57.8% of the
respondents perceive the value for money at Kong Fui very well.
The frequencies for the different possible responses of overall prices as compared to the
competition, merchandise assortment and merchandise quality are also very similar to
each other. Of these three items, merchandise quality performs marginally better, on the
below average side of the responses, with only .7% of the respondents rating it below
average, there after overall prices as compared to the competition (2.0%). Merchandise
assortment has a slightly bigger percentage of respondents valuing it below average
(2.7%).
On the above average side of the responses, overall prices as compared to the competition
takes the middle position with 86.4% of the respondents valuing this item above average.
Merchandise assortment was rated above average by 86.0% of the respondents, whereas
merchandise quality was rated above average by a slightly higher percentage of the
respondents (88.6%).
Although merchandise assortment has the lowest percentage of the respondents rating it
as above average, it is the item out of the three in table 4.16 that has the highest
percentage of respondents that rated it as very well (63.8%). Then comes merchandise
quality with 61.1% of the respondents sharing the perception that the quality of the
merchandise at Kong Fui is very well. At last, 53.7% of the respondents perceive the
overall prices at Kong Fui very well as compared to the competition.
- 46 -
- 46 -
Table 4.8: Descriptive statistics of the measured customer
satisfaction aspects
Customer satisfaction aspects
V
e
r
y

p
o
o
r

(
1
)
P
o
o
r

+

(
2
)
P
o
o
r

(
3
)
N
e
i
t
h
e
r

p
o
o
r
,

n
o
r

g
o
o
d

(
4
)
G
o
o
d

(
5
)
G
o
o
d

+

(
6
)
V
e
r
y

g
o
o
d

(
7
)
N

(
t
o
t
a
l

r
e
s
p
o
n
s
e
s
)
Service provided by the fresh meat
department personnel
3.4 - .7 14.3 19.0 42.2 19.7 147
Service provided by the cosmetics'
department personnel
2.8 1.4 2.1 11.0 16.6 32.4 33.8 145
Service provided at the check-out point 2.0 - .7 11.5 6.1 23.0 56.1 148
Friendliness of cashiers - .7 1.4 4.1 8.1 12.8 73.0 148
Service provided by baggers - 1.3 - 6.0 9.6 13.7 68.5 146
Overall friendliness of our associates - 1.4 .7 12.9 6.8 15.0 63.3 147
Speed of check-out - .7 .7 11.0 5.5 19.2 63.0 146
Overall store service - .7 .7 10.2 8.2 18.4 61.9 147
Variety of our fresh vegetables and -fruit
department
.7 1.3 - 9.4 11.4 17.4 59.7 149
Quality of our fresh vegetables and -fruit
department
.7 .7 - 8.8 10.1 20.3 59.5 148
Overall store cleanliness inside .7 - 3.4 16.1 24.8 21.5 33.6 149
Variety of fresh meat items 1.4 - - 6.8 11.5 28.4 52.0 148
Quality of our fresh meat items .7 - - 8.2 5.4 30.6 55.1 147
Availability of everyday grocery items .7 - .7 6.8 7.5 22.6 61.6 146
Overall value for your money .7 - 2.7 8.8 11.6 18.4 57.8 147
Overall prices as compared to competition - .7 1.3 11.6 11.6 21.1 53.7 147
Merchandise assortment - .7 2.0 11.4 7.4 14.8 63.8 149
Merchandise quality .7 - - 10.7 10.1 17.4 61.1 149
Since there appears to be a relatively immense similarity in the distribution of the
responses for the eighteen customer satisfaction aspects, a further analysis was performed
on these items. Table A-7 depicts the results of this further analysis. Based on these
results it can be stated that Kong Fui performs best based on the means in service
provided at check-out point, closely followed by friendliness of cashiers, service provided by
baggers and availability of everyday grocery items among others. However, as could be
expected based on the general description of the results above the respondents perceive
the performance of Kong Fui on the service provided by the cosmetics department
personnel, the overall store cleanliness inside and the service provided by the fresh meat
department personnel relatively worse.
When taking the percentiles into account, it can be seen that the lower 16%
15
of the
responses for service provided by the cosmetics department personnel, the overall store
cleanliness inside and service provided by the fresh meat department personnel were
scores of 4 or less. Kong Fui performs relatively better on the other fifteen items depicted

15
s X ; conversely, the 84
th
percentile is s X +
- 47 -
- 47 -
in table A-7 with at least a score of 5 for the same lower 16% of the responses. When
taking a closer look to the column of the 50
th
percentile for example, it can be seen that the
three items with the lowest means are the ones with the lowest median as well.
In assessing loyalty program adoption a distinction was made between the adoption of the
focal loyalty program and the adoption of competitors loyalty programs. The results for the
adoption of the loyalty program of Kong Fui are depicted on the left side in table 4.9,
whereas the results for the adoption of competitors loyalty programs are shown on the
right. As much as 56.2% of the respondents appear to have a membership card of Kong Fui
in their household. The great majority (49% of the 56.2%) of those having a loyalty card of
Kong Fui had it of their own. Only 7.2% overall had a loyalty card of Kong Fui at home,
while the card was of another member of their household. However, it should be noticed
that there is still a relatively high proportion of the respondents (43.8%) that do not have a
loyalty card of Kong Fui.
There are 31.6% of the respondents, who possess membership cards of other supermarkets
on Aruba. Actually, it was the aim to get to know cards of which supermarkets the
respondents do possess. However, assuming that not every respondents would be open to
state the name of the supermarkets issuing the loyalty cards they possess, the decision
was made to incorporate the option yes as well. Afterwards, this appears to have been a
good decision, since one-third of the respondents, who have competitors loyalty cards did
fill in the option yes. Furthermore, of those who chose the option yes, namely __ there
were quite a few that did not fill in the name.
Table 4.9: Descriptive statistics of focal and competitors
loyalty programs adoption
Do you have a membership card of Kong Fui
supermarket in your household?
Do you have membership card in your
household of any other supermarket on
Aruba?
N (cases) 153 152 N (cases)
Frequency Percent Frequency Percent
Yes, I have one myself 75 49.0 16 10.5 Yes
Yes, another
household member has
one
11 7.2 32 21.1
Yes,
namely
____
No 67 43.8 104 68.4 No
Table 4.10 depicts the responses of the questions of part B and C of the survey, measuring
customer characteristics. The percentage (24.8%) of respondents with a household size of 3
members is the same as the one for households with 4 members. The next most frequent
household size under the respondents was a household consisting of 2 members. There are
twenty two respondents with 5-member households equaling 14.4% of the sample, seven 6-
member households (4.6%) and only one respondent pertaining to a 9-members household
representing .7% of the sample. Finally, there were also ten single-member households,
accounting for 6.5% of the sample.
Additionally, it is illustrated that the majority of the respondents (75.2%) have a monthly
income inflow in their household, while the percentages of the respondents that have a
more frequent income inflow in their household are illustrated accordingly. It is also
depicted that for the great majority of the respondents the head of their household is a
- 48 -
- 48 -
male (80.4%). The proportion of respondents with a female head of household is 19.6% of
the sample. Of the 153 respondents, 86.9% were females, whereas 13.1% were males.
Regarding the employment status of the head of household, only 3.9% are retired and 2.0%
unemployed, whereas a considerable 94.1% is employed.
Most of the respondents belong to households with two members earning some sort of
income (63.4%). There are also a relatively high percentage of households with only one
member earning some sort of income (28.1%). However, households where there are more
than two members earning some sort of income are relatively rare; a mere 5.9% of the
respondents belong to households with three members earning income, whereas only one
respondent (.7%) is member of a household with four members earning some income.
The category of age of 35 to 44 years was the modal response (46.4%). The other two
categories that were also well represented in the sample were the categories from 25 to 34
years (21.6%) and from 45 to 54 years (25.5%). Only 1.3% of the respondents were younger
than 25 years and merely 5.2% of them were 55 years or older. Regarding the educational
level of the respondents, relatively few respondents had less than high school as their
highest level; merely 4.6% of the sample that is equal to seven respondents. On the other
extreme of educational level, there were relatively few respondents as well; a mere 2.0%
representing only three respondents had a post-graduate degree. There were considerable
more respondents with either their high school completed (17.8%), with some college
education (37.5%) or with a graduate degree (38.2%).
The modal marital status under the respondents was the status of being married.
Although there were a quite high proportion of the respondents, who claimed to be single
(22.9%), the proportion of those that are married was well higher being 63.4%. Besides,
13.7% of the respondents had a marital status other than single or married. However, it
would be worth mentioning that most of the twenty one respondents, who choose other as
their marital status, were either living together or stated that they have a partner. Thus,
in both cases they were not singles.
The modal response concerning the category of the households gross monthly-income was
about 2-times modal, with sixty-five respondents filling in that option. Those sixty-five
respondents were good for 42.5% of the sample. Besides them 15.0% of the respondents
filled in that they had a gross monthly-income below modal for their household. Another
33.3% of them had a gross monthly-income about modal for their household. Finally, there
were fourteen respondent, good for 9.2% of the sample that had a households gross
monthly-income surpassing two times the modal gross income of AFL. 2700.
- 49 -
- 49 -
Table 4.10: Descriptive statistics of the customer
characteristics items
HH members Earners
Number of members Frequency Percent Number of members Frequency Percent
1 10 6.5 0 3 2.0
2 37 24.2 1 43 28.1
3 38 24.8 2 97 63.4
4 38 24.8 3 9 5.9
5 22 14.4 4 1 .7
6 7 4.6 Employment
9 1 .7 Categories Frequency Percent
Income frequency Employed 143 94.1
Categories Frequency Percent Unemployed 3 2.0
Weekly 9 5.9 Retired 6 3.9
Bi-weekly 29 19.0 Gender
Monthly 115 75.2 Gender Frequency Percent
HH gender Female 133 86.9
Gender Frequency Percent Male 20 13.1
Female 30 19.6 Education
Male 123 80.4 Level Frequency Percent
Age Less than high school 7 4.6
Category Frequency Percent Completed high school 27 17.8
Under 25 2 1.3 Some college education 57 37.5
25-34 years 33 21.6 Graduate degree 58 38.2
35-44 years 71 46.4 Post-graduate degree 3 2.0
45-54 years 39 25.5 Gross income
55 years or older 8 5.2 Category Frequency Percent
Marital status Below modal 23 15.0
Status Frequency Percent About modal 51 33.3
Single 35 22.9 About 2-times modal 65 42.5
Married 97 63.4 > 2-times modal 14 9.2
Other 21 13.7
Note: The abbreviations in bold refer to survey questions as listed below.
HH members = What is the number of members in your household?
Earners = How many members of your household are receiving some sort of income?
Income frequency = What is the frequency in which there is an inflow of income in your household?
HH gender = What is the gender of the head of your household?
Age = What is your age category?
Marital status = What is your marital status?
Employment = What is the employment status of the head of your household?
Gender = What is your gender?
Education = What is your highest educational level?
Gross income = What is the category of your households gross monthly-income?
Table 4.11 depicts the frequencies and percentages of the responses to the three questions
related to acculturation preference. As can be seen 66.4% of the respondents completely
support the idea that the personnel of the grocery where they do their shopping should
- 50 -
- 50 -
adopt their culture. One hundred and thirteen respondents, representing 75.3% of the
sample, consider it extremely important for the personnel of the grocery where they shop
to talk their language. And one hundred and eleven respondents, accounting for 74.0% of
the sample, think it is extremely important for the personnel of the grocery store where
they shop to understand their language.
When taking a broader picture the respondents, who consider the adoption of their culture
by the personnel of the grocery store where they shop as important account for 83.2% of
the sample. These figures are respectively 86.6% for the ability of the personnel to talk the
host language and 87.3% for the ability of the personnel to understand the host language.
The respondents, who consider the adoption of their culture by the personnel of the grocery
store where they shop as unimportant, represent a mere 5.6% of the sample. Those
respondents considering it unimportant for the same personnel to talk the host language
account for a little 7.3% of the sample, whereas the proportion equals 8.7% for the
respondents that consider the ability to understand the host language by those same
personnel as unimportant.
Table 4.11: Descriptive results of acculturation preference
items
Acculturation preference items
C
o
m
p
l
e
t
e
l
y

d
i
s
a
g
r
e
e

(
1
)
D
i
s
a
g
r
e
e

-
-
-

(
2
)
D
i
s
a
g
r
e
e

-
-

(
3
)
D
i
s
a
g
r
e
e

-

(
4
)
N
e
i
t
h
e
r

d
i
s
a
g
r
e
e
,

n
o
r

a
g
r
e
e

(
5
)
A
g
r
e
e

+

(
6
)
A
g
r
e
e

+
+

(
7
)
A
g
r
e
e

+
+
+

(
8
)
C
o
m
p
l
e
t
e
l
y

a
g
r
e
e

(
9
)
N

(
t
o
t
a
l

r
e
s
p
o
n
s
e
s
)
I consider it important for the personnel,
of the grocery store where I shop, to adopt
the host culture
4.9 - - .7 11.2 4.9 1.4 10.5 66.4 143
I consider it important for the personnel
of the grocery store where I do my
shopping to talk the host language
5.3 .7 - 1.3 6.0 2.7 3.3 5.3 75.3 150
I consider it important for the personnel
of the grocery store where I shop to
understand the host language
6.7 .7 - 1.3 4.0 2.7 3.3 7.3 74.0 150
- 51 -
- 51 -
Attitudinal loyalty and word-of-mouth
Here follows two frequency tables where the distribution of respondents agreement with
some statements regarding customer loyalty is shown. For instance, table 4.12 shows that
the majority of the respondents (64.7%) perceive themselves as loyal patrons of Kong Fui.
A little more than 10% of the respondents do not consider themselves as loyal patrons of
Kong Fui; to be exact they represent 11.6% of the sample.
The responses as to the patronage of another supermarket in case that they would have to
do it again, were less unequally distributed. More respondents appear to be willing to
patronize another supermarket (43.6%) as compared to the ones that are not willing to do
so (30.3). What is remarkable is that the mode for this statement is the average option, in
which the respondents do not agree neither disagree with the statement.
However, a great proportion of the respondents are willing to stick to Kong Fui for their
grocery purchases, due to their perception that that is their best choice (65.6%). Moreover,
a large 35.9% of them strongly agree to be willing to keep that bond with Kong Fui, since it
is their best choice. A quite irrelevant proportion of the respondents strongly disagree in
this regard (1.4%).
Table 4.12: Descriptive results of attitude and WoM items
Attitudinal loyalty
&
WoM items
S
t
r
o
n
g
l
y

d
i
s
a
g
r
e
e
D
i
s
a
g
r
e
e
N
e
i
t
h
e
r

d
i
s
a
g
r
e
e
,

n
o
r

a
g
r
e
e
A
g
r
e
e
S
t
r
o
n
g
l
y

a
g
r
e
e
N

(
t
o
t
a
l

r
e
s
p
o
n
s
e
s
)
I consider myself to be a loyal patron of
Kong Fui supermarket
4.1 7.5 23.8 32.7 32.0 147
If I had to do it over again, I would
patronize another supermarket
8.5 21.8 26.1 19.0 24.6 142
I try to stick to Kong Fui supermarket for
my grocery purchases, since it is the best
choice for me
1.4 5.5 27.6 29.7 35.9 145
To me, Kong Fui supermarket is the
same as other supermarkets
4.7 8.7 24.8 30.2 31.5 149
If other people inquired about my grocery
store then I would recommend Kong Fui
3.4 6.1 27.0 33.1 30.4 148
I am happy to voluntarily recommend
Kong Fui to others
3.4 5.4 27.9 32.0 31.3 147
Next, only a slight 4.7% of the respondents seem to perceive Kong Fui as a supermarket
different from its competitors. Much of the respondents (31.5%) really do not see Kong Fui
as a supermarket that stands out compared to its competitors.
Customer loyalty
- 52 -
- 52 -
Concerning the respondents willingness to recommend Kong Fui to other people, they
appear to be willing to do it both inquired and voluntarily in similar proportions. For
example, whereas forty-five respondents (30.4%) would be totally willing to recommend
Kong Fui if inquired by other people, forty-six respondents (31.3%) are absolutely
enthusiastic to recommend the supermarket voluntarily. Furthermore, forty respondents
(27.0%) are indifferent to pass word-of-mouth when asked for, whereas forty-one
respondents (27.9%) are indifferent to do it voluntarily.
Repeat purchase behavior
Concerning the frequency of visits during last month, Kong Fui appears to have received a
visit of 30.7% of the respondents once a week (see table 4.13). Sixty-two respondents
(40.6%) visited Kong Fui more often than once a week during last month. Eighteen of these
respondents seem to have visited Kong Fui even more than three times a week during last
month.
However, supermarkets in general have been visited once or twice last month by forty-five
respondents, which accounts for 29.4% of the sample and is actually the mode. A minimum
of nine respondents (5.9%) visited supermarkets in general more than three times a week
during last month.
Finally, most respondents (30.7%) visited grocery stores in general once or twice last
month as well. A mere 7.2% of the respondents visited grocery stores in general more than
three times a week during last month. However, it is remarkable that this proportion is
greater here than it is for the visits of supermarkets in general, but still smaller than it is
for the visits of Kong Fui supermarket during last month. Thereby, it can be concluded
that Kong Fui was more often picked for grocery shopping trips that were more often than
three times a week, as compared to both supermarkets in general and grocery stores in
general
16
. And apparently Kong Fui is more sensitive for customers going to another type
of grocery store than going to another supermarket when shopping that often.
Table 4.13: Descriptive results of repeat purchase behavior
items
Repeat purchase behavior items
L
e
s
s

t
h
a
n

o
n
c
e

a

m
o
n
t
h
O
n
c
e

o
r

t
w
i
c
e

a

m
o
n
t
h
O
n
c
e

a

w
e
e
k
2
-
3

t
i
m
e
s

a

w
e
e
k
M
o
r
e

t
h
a
n

3

t
i
m
e
s

a

w
e
e
k
N

(
t
o
t
a
l

r
e
s
p
o
n
s
e
s
)
How many times have you visited Kong
Fui supermarket last month?
12.4 16.3 30.7 28.8 11.8 153
How many times have you visited
supermarkets in general last month?
28.8 29.4 22.2 13.7 5.9 153
How many times have you visited grocery
stores in general last month?
30.1 30.7 20.9 11.1 7.2 153

16
This implicitly coincides with the findings of Gonzlez-Benito, Muoz-Gallego and Kopalle, 2005.
- 53 -
- 53 -
4.2.2 Basic descriptive statistics of loyalty program adoption predictors
Table 4.14 depicts that most of the respondents strongly enjoy participating in loyalty or
saving programs (33.3%), perceive loyalty and saving programs as truly offering attractive
benefits (31.3%) and really appreciate being selected for loyalty programs and special
offers (34.0%). A mere 0.7% of the respondents really do not appreciate to be selected for
loyalty programs or special offers, whereas 1.4% of the respondents think that loyalty and
saving programs truly offer attractive benefits and three respondents (2.1%) absolutely do
not enjoy participating in loyalty or saving programs.
Table 4.14: Descriptive results of enjoyment items &
idiosyncratic fit measure
&
idiosyncratic fit items
S
t
r
o
n
g
l
y

d
i
s
a
g
r
e
e
D
i
s
a
g
r
e
e
N
e
i
t
h
e
r

d
i
s
a
g
r
e
e
,

n
o
r

a
g
r
e
e
A
g
r
e
e
S
t
r
o
n
g
l
y

a
g
r
e
e
N

(
t
o
t
a
l

r
e
s
p
o
n
s
e
s
)
I enjoy participating in loyalty or saving
programs
2.1 9.0 16.0 39.6 33.3 144
Loyalty and saving programs offer
attractive benefits
1.4 6.8 18.4 42.2 31.3 147
I appreciate being selected for loyalty
programs and special offers
.7 6.9 15.3 43.1 34.0 144
I consider the extent to which rewards
are achievable with the loyalty program
of Kong Fui is very important
2.8 7.0 21.7 31.5 37.1 143
Idiosyncratic fit
The extent to which rewards are achievable with the loyalty program of Kong Fui is
perceived as very important by 37.1% of the respondents and a slightly fewer 31.5% of
them consider it important (see table 4.14; above). A mere 2.8% of the respondents think
the extent to achieve rewards through the loyalty program of Kong Fui is completely
unimportant, whereas a slightly larger 7.0% of them consider it unimportant. Still thirty-
one respondents (21.7%) are indifferent regarding the importance of the achievability of
rewards through the loyalty program of Kong Fui.
Program design
Direct rewards from loyalty programs are truly preferred by 29.1% of the respondents (see
table 4.15). Still, forty-nine respondents (34.8%) seem to prefer direct rewards. Conversely,
a mere 3.5% of the respondents truly do not prefer direct rewards.
Most of the respondents (33.8%) absolutely detest participating in loyalty programs where
a fee has to be paid. A relatively small proportion equaling 14.8% of the respondents would
not mind to participate in loyalty programs where fees have to be paid. However, there are
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- 54 -
still twenty-nine respondents representing 20.4% of the sample who are indifferent
towards the existence of membership fees for loyalty programs.
Delayed rewards are preferred by 65.2% of the sample; half of that proportion even
strongly prefers to get delayed rewards for their participation in loyalty programs. Thirty-
three respondents representing 22.9% of the sample are indifferent towards receiving
delayed rewards for their participation in loyalty programs. And a mere 2.1% of the
respondents strongly dislike receiving delayed rewards.
Table 4.15: Descriptive results of design items & privacy
measure
&
Privacy concern items
S
t
r
o
n
g
l
y

d
i
s
a
g
r
e
e
D
i
s
a
g
r
e
e
N
e
i
t
h
e
r

d
i
s
a
g
r
e
e
,

n
o
r

a
g
r
e
e
A
g
r
e
e
S
t
r
o
n
g
l
y

a
g
r
e
e
N

(
t
o
t
a
l

r
e
s
p
o
n
s
e
s
)
I prefer direct reward for my
participation in a loyalty program
3.5 9.9 22.7 34.8 29.1 141
I do not like to pay fees to participate in a
loyalty program
2.8 12.0 20.4 31.0 33.8 142
I prefer a delayed reward for my
participation in a loyalty program
2.1 9.7 22.9 32.6 32.6 144
The registration systems of loyalty programs
infringe on my privacy
10.6 17.6 30.3 26.1 15.5 142
Privacy concerns
Most of the respondents (30.3%) are indifferent towards the violation of their privacy by
the registration systems of loyalty programs (see table 4.15; above). Additionally, fifty-nine
respondents (41.6%) perceive the registration systems of loyalty programs as a violation of
their privacy, whereas forty respondents (28.2%) do not perceive it as a violation of their
privacy.
4.2.3 Reduction of multi-item measures
Factor analyses were performed as described previously in the analytical method section
to reduce the multi-items of questions three, eight, nine and ten. Prior to assessing the
factors, it was checked whether it was favorable to perform a factor analysis on these
items. The results of the KMO-test and Bartlett's Test of Sphericity supported the
application of factor analysis on the items on which factor analysis was performed (see
table A-8).
As illustrated in table A-9, the three shopping motivations as suggested by prior research
(i.e. Mgi, 2003) were supported by the results of this research. The three factors all
together explain as much as 65.43% of the variance related to shopper characteristics. The
results further show that the variance explained by each of the three factors are
respectively 23.45% by economic shopping motivation, 25.58% by personalizing shopping
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- 55 -
motivation and 17.17% explained by apathetic shopping motivation. Consequently, the
internal consistency each of the three factors was evaluated. This reliability test resulted
in an internal consistency of .8497 for economic shopping motivation, .8448 for
personalizing shopping motivation and .6908 for apathetic shopping motivation.
However, it is worth mentioning that the item I enjoy shopping for groceries had a high
load towards the factor representing personalizing shopping motivation. This could be
explained by the fact that the higher the personalizing motivation for shopping the more a
customer would enjoy shopping for groceries. Still, the item was included in the economic
shopping motivation factor, since it has the minimally acceptable factor loading of +/- .30
as proposed by Hair et al. (2006). Therefore, three four-item factors were maintained.
Next, a new set of factor analyses were performed to assess the variance that each set of
items explains for the factor to which they belong. These tests showed that 69.29% of the
variance in the economic shopping motivation factor is explained by the four items that
comprise that factor (see table A-9). Subsequently, the four items comprising the factor
personalizing shopping motivation explain 69.03% of the variance in that factor, while
52.74% of the variance in the factor apathetic shopping motivation is explained by the
items comprising it.
Table 4.16: Overview of factor analysis and reliability analysis
for customer satisfaction
Variables Factor 1
How satisfied are you with Kong Fui
supermarket?
How well does Kong Fui supermarket match
your expectations?
Imagine a perfect grocery store. How close to
this ideal is Kong Fui supermarket?
Customer
satisfaction
Eigenvalues 79.915
Cronbach -score .8224
17
Table 4.16 depicts the results of both the factor analysis and the reliability analysis. As
can be seen by the eigenvalues, a great proportion of the variance of customer satisfaction
is explained by these three items. When the internal consistency of the factor is assessed,
it can be seen that the deletion of the item How satisfied are you with Kong Fui
supermarket? would lead to a higher level of internal consistency. The suggestion to delete
that item may be caused by the fact that although the items were based on prior research
(i.e. Mgi, 2003), the scaling of this particular item was adapted.
Regarding the aspects of customer satisfaction no support could be found for prior research
(see table A- 10). Although the items from prior research (i.e. Gmez et al. 2004) were
adapted and some items were added, it was expected to get similar results. However, this
was not the case. Apparently, the respondents do not see so much difference between the
different aspects of customer satisfaction delivery. This could be expected following the
general results covered previously were there was so much similarity in the
distribution of the responses for these items. This expectation is further supported by the
suggestion to delete the item Service provided by the cosmetics department personnel in
order to get a higher internal consistency for factor 1. A further look at the items that were

17
Becomes .9035 if How satisfied are you with Kong Fui supermarket? is deleted
- 56 -
- 56 -
either not included in the set pertaining to factor 1 or suggested to be deleted shows that
they are precisely the three items on which Kong Fui scored worst and the item on which
it scored best.
Although the items used to measure loyalty program enjoyment and loyalty program
design were not directly based on prior research as discussed previously in the
operationalization of the model both factors performed really good on the factor analysis
and the reliability analysis (see table A-11). Concerning the items used to assess loyalty
program enjoyment the three items appear to explain as much as 88.86% of the variance of
loyalty program enjoyment. These three items even seem to be strongly internal consistent
with a Cronbachs alpha of .9404 and no suggestion were made to delete any of them for a
higher internal consistency.
As for loyalty program design, the three items belonging to this factor also explain a high
proportion of variance in this factor (77.22%). Moreover, the results of the reliability
analysis show that these three items are highly internal consistent with a Cronbachs
alpha as high as .8576. And as was the case with the reliability test for the construct
loyalty program enjoyment, no suggestion has been made to delete any item here.
Regarding the construct attitudinal loyalty the results of the factor analysis suggest that
the four items used pertain to two different factors factors C and D as shown in the
appendix (table A-11). This result was unexpected, since prior research used all these for
items in assessing attitudinal loyalty (i.e. Pritchard et al., 1999). The fact that the results
suggest the combination of items from different studies (Selin et al., 1988 and Muncy,
1983) into one factor made the decision to perform a reliability test one these four items
undeniable. Contrary, to the results of the factor analysis the results of the reliability
analysis were as expected. The internal consistency of the factor based on four items
resulted being pretty high (.74) and no suggestion was made to delete any of the items.
Still, it should be noted that the internal consistency is relatively low as compared to the
other internal consistencies based on the Cronbachs alphas in the same table. However,
further analysis will be done with attitudinal loyalty comprising all these four items, since
the Cronbachs alpha is still well above the required score.
As illustrated in table A-12, the three items related to hedonic shopping motivation
explain 77.15% of the variance in that factor. However, the results of the reliability test,
suggest that the inclusion of the item I feel freed from domestic chores when shopping for
groceries reduces the internal consistency of the factor. However, since the factor analysis
results pointed out the existence of a sole factor for these items, the decision was made to
stick to one factor based on all three items. Moreover, the internal consistency of the factor
based on the three items is considerably higher than the minimally required score.
The three items, measuring acculturation preference, seem to explain a considerable
89.28% of the variance in that factor (see table A-12). The internal consistency of the factor
based on these three items is considerably high with a Cronbachs alpha of .9569.
However, the reliability test results suggest the deletion of the item I consider it
important for the personnel, of the grocery store where I shop, to adopt the host culture to
get a higher internal consistency. But based on the same justification as for the hedonic
shopping motivation construct, it was decided to hold on to all three items.
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- 57 -
4 . 3 N o n - l i n e a r i n f l u e n c e o f a n t e c e d e n t s
4.3.1 Influence of the binary customer characteristics
Influence on loyalty program adoption
The Chi-square test was used to assess the influence of the binary customer
characteristics variables related to gender on loyalty program adoption
18
. First, the
influence of the gender of the head of household on the adoption of the focal loyalty
program was analyzed. As illustrated at the top in table 4.17, the value of chi-square
equals .584 with a significance level of .445. Therefore, the chance on such a chi-square is
.445 if the null-hypothesis that the variables are statistically independent is true.
Consequently, if a confidence level of 95 % is maintained (o = 0.05), the null-hypothesis
would not be rejected. With 95% confidence there is no statistical significant relation
between the gender of head of household and focal card ownership.
Next, the influence of the gender of the head of household on adoption of competitors
loyalty programs was evaluated. Here, a chi-square of 2.911 corresponding to a
significance level of .088 was obtained. Thereby, it can be concluded that the chance on
such a chi-square is relatively small. However, it is not small enough when the
requirement of a 95% confidence level is maintained. Consequently, it can be stated with
95% confidence that there is no statistical significant influence of the gender of head of
household on competitors card ownership.
Table 4.17: Chi-square test results; influence binary (gender)
items on loyalty program adoption
Focal loyalty card adoption
Competitors loyalty card adoption
Female Male Female Male
Yes 15 71 Yes 13 35
No 15 52 No 16 88
2
.584
2
2.911
Sig. NS Sig. +
Focal loyalty card adoption
Competitors loyalty card adoption
Yes 80 6 Yes 43 5
No 53 14 No 89 15
2
6.421
2
.461
Sig. * Sig. NS
Note: NS = Not Significant
Top: Gender of head of household / Bottom: Respondents gender
001 . * * * . 01 . * * . 05 . * . 1 . < < < <
+
p p p p
Then, an analysis was made of the influence of the gender of the respondent on adoption of
the loyalty program. This analysis delivered a chi-square of 6.421 corresponding to a
significance level of .011 (see table 4.17; bottom). These results support the existence of

18
Note that if the test for any bivariate analysis does not meet any of the two requirements as stated earlier,
the results of that particular test will be provided in the appendix. Furthermore, for a description of the
abbreviations used for the variables in the subsequent sections refer to table A-4 in appendix 1
- 58 -
- 58 -
statistically significant influence of gender of the customer on focal card ownership. Hence,
one can be 95% sure of the existence of that influence.
At last, an analysis of the influence of gender of the respondent on adoption of competitors
loyalty programs, delivered the results as illustrated in table 4.17. Based on the
significance level of .497 obtained here, it can be concluded with 95% confidence that the
gender of the customer does not influence the adoption of competitors loyalty programs.
Influence on repeat purchase behavior
In order to assess the influence of both gender related customer characteristics on
behavioral loyalty the Mann-Whitney U-test was used. As depicted in table 4.18, the null-
hypothesis that samples come from identical populations can not be rejected based on
the two-tailed significance level of .089 with a confidence of 95%. Therefore, the gender of
head of household does not have a statistical significant influence on behavioral loyalty.
This means that the distribution of behavioral loyalty does not differ between households
depending on the gender of the head of household.
Additionally, similar results are illustrated (table 4.18) for the influence of gender of the
respondent on behavioral loyalty. It can be stated with 95% confidence that there is no
influence of respondents gender on behavioral loyalty.
Table 4.18: Mann-Whitney U test results for behavioral loyalty
Gender of head of household Gender of respondent
Mean rank 65.05 79.91 78.94 64.13
Sum of ranks 1951.50 9829.50 10498.50 1282.50
U 1486.5 1072.5
Sig. + NS
001 . * * * . 01 . * * . 05 . * . 1 . < < < <
+
p p p p
Influence on attitudinal loyalty and word-of-mouth
In assessing the influence of both gender of the head of household and the gender of the
respondent on attitudinal loyalty and word-of-mouth the student t-test was used. The F-
value and its corresponding significance show that the variances differed significantly
from each other (see table 4.19). Therefore, the statistics of Equal variances not assumed
were used. The t-value for Equal variances not assumed is .939. The significance level (Sig.
2-tailed) equals .354; at 36.454 degrees of freedom. Therefore, the null-hypothesis (1=2)
can not be rejected with a confidence of 95%. The mean attitudinal loyalty scores for male
and female heads of household does not differ significantly from each other.
Consequently, it can be said that there is no influence of gender of head of household on
attitudinal loyalty.
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- 59 -
Table 4.19: Student t- test results for head of HH
Attitude WoM
2

2
=
2

2
=
Mean difference .1441 .1441 -.091 -.091
S.E. difference .1248 .1535 .2133 .1937
F-value 7.291* .725
t-value .939 -.424
Sig. NS NS
001 . * * * . 01 . * * . 05 . * . 1 . < < < <
+
p p p p
Next, the influence of gender of head of household on word-of-mouth was also assessed.
The F-value and its corresponding significance show that the variances do not differ
significantly from each other (see table 4.19). This resulted in the use of the statistics of
Equal variances assumed. The t-value for Equal variances assumed is -.424 and the
significance level is .672; at 146 degrees of freedom. These statistics show that there is no
influence between gender of head of household and word-of-mouth. Similarly, table A-13 in
appendix 1 depict that there is no influence of gender of the respondent for neither
attitudinal loyalty nor word-of-mouth.
4.3.2 Influence of non-customer characteristics
The Chi-square test was used to assess the influence of enjoyment, design, privacy and
idiosyncrasy on loyalty program adoption. Since similar results have been discussed
previously and none of these influences appeared to be significant, they will not be
discussed explicitly. For an overview of the results refer to table A-14.
In order to assess the influence of economic, personalizing, apathetic, hedonic, utilitarian,
satisfaction, acculturation and card ownership on behavioral loyalty the Mann-Whitney U-
test was used. As depicted in table A-15, the null-hypotheses that samples come from
identical populations can be rejected based on the two-tailed significance levels of each of
these variables with a reliability of at least 90%. Therefore, each of these variables does
have a statistical significant influence on behavioral loyalty.
In assessing the influence of economic, personalizing, apathetic, hedonic, utilitarian,
satisfaction, acculturation and card ownership on attitudinal loyalty and word-of-mouth
the student t-test was used. As discussed previously, the F-value and its corresponding
significance were evaluated to see whether the Equal variances not assumed or the Equal
variances assumed statistics should be examined. Consequently, the t-values and their
corresponding significance levels ( tailed Sig 2 . ) were examined to see whether significant
influences of the different antecedents do exist on either attitudinal loyalty or word-of-
mouth. The only variable that appeared to have a significant influence on attitudinal
loyalty was economic with 90% reliability; as depicted in tables A-16 and A-17. On the
other hand, different variables appeared to be significant in influencing word-of-mouth.
The only ones that were insignificant were hedonic and card ownership. Apathetic and
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- 60 -
satisfaction resulted in the ones with the highest reliability, which equaled 99.9%; for an
illustration refer to tables A-16 and A-17.
4.3.3 Influence of the customer characteristics with manifold categories
Chi-square tests were used to assess the influence of the customer characteristics with
more than two (manifold-) categories on loyalty program adoption
19
. Here again a
distinction was made between the adoption of the focal loyalty program and the adoption
of competitors loyalty programs.
The chance on a chi-square of 2.886 is .236 if the null-hypothesis that marital status and
the adoption of competitors loyalty programs are statistically independent is true (see
table 4.20). Maintaining a reliability of 95% ( = 0.05) the null-hypothesis can not be
rejected. Consequently, with 95% reliability there is no statistical significant relationship
between marital status and adoption of competitors loyalty programs. Therefore, it can be
concluded that there is no influence of marital status on the adoption of competitors
loyalty programs.
Then, the chance on a chi-square of 2.299 is .317 when the null-hypothesis that marital
status and the adoption of the focal loyalty program are statistically independent is true.
Therefore, again with a reliability of 95% it can be concluded that marital status does not
have an influence on the adoption of the focal loyalty program.
On the contrary, the chance on a chi-square of 12.424 is .006 with a null-hypothesis that
the category of households gross monthly-income and the adoption of competitors loyalty
programs are statistically independent that holds (see table 4.20). Therefore, it can be
concluded here with 99% (Sig. = .006) reliability that the category of households gross
monthly income influences the adoption of competitors loyalty programs.
Furthermore, there is sufficient evidence to reject the null hypothesis that the category
of households gross monthly-income and the adoption of the focal loyalty program are
statistically independent. To be specific, the figures show that the chance on a chi-square
of 12.430 is only .006 if the null-hypothesis is true. Therefore, the null-hypothesis can be
rejected with 95% confidence and it can be concluded that the category of households gross
monthly-income influences the adoption of the focal loyalty program as well.

19
If the test for any bivariate analysis does not meet any of the two requirements as stated earlier, the results
of that particular test are provided in appendix 1.
- 61 -
- 61 -
Table 4.20: Chi-square test results; influence marital status &
gross income on card ownership
Competitors loyalty programs
adoption
Focal loyalty program adoption
Single Married Other, _ Single Married Other, __
Yes 14 26 8 18 38 11
No 20 71 13 17 59 10
2
2.886 2.299
Sig. NS NS
Competitors loyalty programs
adoption
Focal loyalty program adoption
Below
modal
About
modal
About
2-times
modal
More
than 2-
times
modal
Below
modal
About
modal
About
2-times
modal
More
than 2-
times
modal
Yes 11 19 11 7 13 25 45 3
No 12 31 54 7 10 26 20 11
2
12.424 12.430
Sig. ** **
Top: Marital Status
Bottom: Gross income
001 . * * * . 01 . * * . 05 . * . 1 . < < < <
+
p p p p
The influence of the customer characteristics with more than two (manifold ) categories
on behavioral loyalty was assessed by performing some Kruskal-Wallis tests
20
. The
assessment of the influence of employment status of the head of household on behavioral
loyalty produced a chi-square of 8.336 as depicted in table 4.21 (at the top) coupled with a
significance value of .015; at 2 degrees of freedom. The null-hypothesis that the three
samples come from identical populations is rejected with a reliability of 95%
( 05 . 0 . . < Sig Asymp ). Therefore, it can be stated that the distribution of behavioral loyalty
of the different employment status are not (all three) equal to each other.
The statistics obtained from the evaluation of the influence of highest educational level on
behavioral loyalty show that this influence does exist as well (see table 4.21; center). The
Chi-square is 10.037 coupled with a significance value of .040; at 4 degrees of freedom.
These figures support the rejection of the null-hypothesis that the five samples are from
the same population. The null-hypothesis was also rejected with 95% reliability.
Consequently, educational level influences behavioral loyalty.
The assessment of the influence of households gross monthly-income category on
behavioral loyalty produced a Chi-square of 12.607 together with a .006 significance value;
at 3 degrees of freedom (see table 4.21; bottom). Consequently, the null-hypothesis that
the four samples come from the same population can be rejected with a reliability of 99%

20
Note that mostly the significant results are depicted in tables throughout this section; the other results are
illustrated in appendix 1.
- 62 -
- 62 -
( 01 . 0 . . < Sig Asymp ). So, households gross monthly-income influences repeat purchase
behavior.
Table 4.21: Summary of Kruskal-Wallis tests results
Employment on repeat purchase
Employment status of the
head of household
N Mean Rank
Employed 143 74.36
Unemployed 3 80.50
Retired 6 125.58
2
= 8.336* Sig. = .015 (df. = 2)
Education on repeat purchase
Highest level of education N Mean Rank
Less than high school 7 101.21
Completed high school 27 67.41
Some college education 57 66.82
Graduate degree 58 86.64
Postgraduate degree 3 88.67
2
= 10.037* Sig. = .040 (df. = 4)
Gross income on repeat purchase
Gross income N Mean Rank
Below modal 23 94.93
About modal 51 67.01
About 2-times modal 65 83.62
More than 2-times modal 14 53.21
2
= 12.607** Sig. = .006 (df. = 3)
001 . * * * . 01 . * * . 05 . * . 1 . < < < <
+
p p p p
The influence of the customer characteristics with more than two (manifold -) categories on
both attitudinal loyalty and the behavioral loyalty measure word-of-mouth was assessed
by performing some analyses of variance (ANOVA)
21
. In this regard, the first null-
hypothesis that is rejected stated that the population means of the all the groups are
equal. This means that indifferent of the frequency on which the respondents have an
inflow of income in their household, their mean for attitudinal loyalty are the same. As
shown in table 4.22 (top-left), the means do differ, with those with a bi-weekly income
inflow having the highest mean for attitudinal loyalty. Furthermore, the significance
value of .054 claims that the null-hypothesis can be rejected with 90% reliability. This
means that although a little weaker than the 95% confidence interval, there is support for
the existence of an influence of income frequency on attitudinal loyalty.
Concerning the null-hypothesis stating that the population means of word-of-mouth are
equal for all the categories of frequency of income inflow, ANOVA shows that this
statement can be rejected with 95% reliability. The significance value of .015 shows that

21
Note that mostly the significant results are depicted in tables throughout this section; the other results are
illustrated in appendix 1.
- 63 -
- 63 -
the reliability for such a rejection is 98.5%. Furthermore, it can be seen that the mean for
word-of-mouth in the category of those with a weekly income inflow is considerably higher
than for the other two categories. Consequently, this supports the existence of an influence
of frequency of income inflow on word-of-mouth.
Table 4.22 (top-right) also depicts the results for the analysis of variance (ANOVA) for the
two null-hypotheses the population means of attitudinal loyalty is equal for all the
employment status and the population means of word-of-mouth are equal for all the
employment status. These results show a significance level of .019 for the first null-
hypothesis, thereby indicating that the null-hypothesis can be rejected with a reliability of
95%. Conversely, the results show a significance level of .093 for the second null-
hypothesis, thereby indicating that that null-hypothesis can also be rejected. However, the
reliability for this rejection would be a lower but still high 90%. A closer look to the table
illustrates that the respondents who are retired are the most attitudinally loyal to Kong
Fui, whereas those that are employed as the least attitudinally loyal. On the other hand,
the unemployed respondents are the least behaviorally loyal (word-of-mouth) ones,
whereas the retired ones show the highest level of behavioral loyalty through word-of-
mouth. Therefore, there appear to be an influence of employment status of the head of
household on both attitudinal loyalty and behavioral loyalty through word-of-mouth.
However, the influence of employment status on attitudinal loyalty is considerably
stronger.
The results of the ANOVA concerning the two null-hypotheses the population means of
attitudinal loyalty is equal for all the age categories and the population means of word-of-
mouth are equal for all the age categories are illustrated in table 4.22 (left-center). As can
be seen, the respondents under the age of 25 years are the most attitudinally loyal ones,
whereas the ones between 35 and 44 years of age are the least attitudinally loyal ones. The
significance value of .023 shows that the null-hypothesis in this case can be rejected with
95% reliability. Thereby, it is illustrated that age category does influence attitudinal
loyalty.
On the contrary, the respondents 55 years of age or older are the ones who are the most
behaviorally loyal for passing on word of mouth, whereas the ones between 25 and 34
years of age are the least behaviorally loyal ones to pass on word of mouth. The
significance value for this analysis equals .308 and illustrates that the null-hypothesis
tested in this regard can not be rejected with 95% reliability. Consequently, there is no
support for the existence of an influence of age category on word-of-mouth.
The results of the analyses concerning the two null-hypotheses the population means of
attitudinal loyalty is equal for all the education levels and the population means of word-
of-mouth are equal for all the education level are summarized in table 4.22 (right-center).
As can be seen, the respondents with the lowest level of education are the most
attitudinally loyal ones, whereas the ones with some college education are the least
attitudinally loyal ones. The significance value obtained in this case equals .040, thereby
supporting the rejection of the null-hypothesis with a reliability of 95%. Therefore, there is
enough support for the claim that education level does influence attitudinal loyalty.
- 64 -
- 64 -
Table 4.22: Results from different analyses of variance
Income frequency on attitude and WoM Employment on attitude and WoM
Income
frequency
Attitudinal
loyalty
Word-of-
mouth
Employment
Attitudinal
loyalty
Word-of-
mouth
Mean Mean Mean Mean
Weekly 3.14 4.67 Employed 3.12 3.79
Bi-weekly 3.40 3.98 Unemployed 3.25 3.67
Monthly 3.09 3.70 Retired 3.90 4.80
Sig. .054 .015 Sig. .019 .093
Age on attitude and WoM Education on attitude loyalty and WoM
Age
Attitudinal
loyalty
Word-of-
mouth
Education
Attitudinal
loyalty
Word-of-
mouth
Mean Mean Mean Mean
Under 25 yrs 4.00 4.00 Less than high
school
3.92 4.25
25-34 yrs 3.10 3.53 Completed high
school
3.14 3.64
35-44 yrs 3.08 3.85 Some college
education
3.10 3.69
45-54 yrs 3.19 3.89 Graduate degree 3.12 3.98
55 yrs and
older
3.71 4.36 Postgraduate
degree
3.25 3.50
Sig. .023 .308 Sig. .040 .354
Gross income on attitude loyalty and
WoM
Gross
income
Attitudinal
loyalty
Word-of-
mouth
Mean Mean
Below modal 3.48 3.89
About modal 3.08 3.62
About 2-
times modal
3.14 4.04
More than 2-
times modal
2.93 3.33
Sig. .029 .052
In contrast, there is not enough support for the existence of a relation between education
level and word-of-mouth. The figures illustrate that although the people with the lowest
level of education are the most behaviorally loyal ones for passing word of mouth and
the respondents with a postgraduate degree the least behaviorally loyal ones, the
reliability to reject the null-hypothesis is low. The significance value is a considerable .354,
thereby showing support for the claim that the population means of word-of-mouth for all
the groups of education levels.
Table 4.22 (bottom-left) summarizes the results of the analyses concerning the two null-
hypotheses the population means of attitudinal loyalty is equal for all the gross income
categories and the population means of word-of-mouth are equal for all the gross income
categories. Whereas the first null-hypothesis can be rejected with a reliability of 95%
( 05 . 0 . < Sig ), the second null-hypothesis can be rejected with 90% reliability ( 10 . 0 . < Sig ).
- 65 -
- 65 -
Consequently, gross income category influences both attitudinal loyalty and word-of-
mouth.
A closer look at the statistics illustrates that the respondents with a gross income below
modal have the highest scores for attitudinal loyalty (3.48), whereas the respondents with
the highest gross incomes show the lowest scores for attitudinal loyalty (2.93). Conversely,
the respondents with a gross income about 2-times modal have the score higher on word-
of-mouth (4.04), whereas the respondents with the highest gross incomes score the lowest
on word-of-mouth (3.33).
4 . 4 L i n e a r i n f l u e n c e o f t h e a n t e c e d e n t s o f b o t h
l a y e r s
In this section the correlation matrix for the independent variables is examined first.
Subsequently, the results of the regression analyses both linear regression and logistic
regression are performed and the antecedents of loyalty according to this particular
sample are discussed. Thereby attention is drawn to the tolerance and VIF of the selected
independent variables, which are assumed to be antecedents of customer loyalty.
Afterward, similar examinations are performed for the antecedents of loyalty program
adoption.
4.4.1 Influence on word-of-mouth
The effects of the antecedents of loyalty on word-of-mouth are covered first. Prior to the
regression analysis, a correlation matrix of the independent variables was made and
examined, thereby trying to disclose strong correlations. The examination showed that the
highest correlation was between the independent variables was .693, which was between
acculturation preference and utilitarian shopping motive. Consequently, no independent
variable was dropped for the regression analysis.
The coefficients of the stepwise multiple regression analysis for the dependent variable
word-of-mouth are summarized in table A-26, whereas a summary is depicted in table
4.23. The correlation between the dependent variable word-of-mouth and the set of
independents satisfaction, personalizing and income frequency is .503. The coefficient
of determination shows that 25% of the variation of word-of-mouth is explained by the
three independent variables. Additionally, the analysis of variance used to evaluate
whether the model is significant ( 0 :
0
= multiple H ), provided an F-value of 16.795. Based
on this F-value the null-hypothesis can be rejected (Sig=.000). Consequently, the model is
significant with a reliability of 99.9%.
Antecedents of customer loyalty
- 66 -
- 66 -
Table 4.23: Summary of stepwise multiple linear regression analysis for WoM and attitude
Dependent variables:
WoM
Attitude
B
B
SE
B
B
SE
Constant 1.235* .616 2.428*** .284
Personalizing .179*** .054 - -
Apathetic - - -.136*** .029
Satisfaction .309*** .068 .211*** .043
Card ownership - - .311*** .093
Income frequency -.842** .304 - -
Gender - - .264* .128
R .503
22
.545
23
R
2
.253 .297
F-value 16.795*** 15.602***
Note:
B
SE = Std. Error of B
001 . * * * . 01 . * * . 05 . * . 1 . < < < <
+
p p p p
The results of the single linear regression analysis between word-of-mouth and each of the
potential predictors individually are depicted in table A-27. These statistics illustrate that
although not all the studied predictors had a significant linear relation with word-of-
mouth. However, age of the respondents seems to be 90% reliable to have a linear
influence on word-of-mouth. Additionally, acculturation preference and hedonic shopping
motivation show a 95% reliable linear relation towards word-of-mouth, whereas utilitarian
shopping motivation and income frequency illustrate reliability as high as 99%. Finally,
the reliability of personalizing shopping motivation, customer satisfaction and loyalty card
adoption is even higher (99.9% reliable).
Furthermore, the correlations between word-of-mouth and each of these predictors
individually appeared to be as high as .385 between word-of-mouth and customer
satisfaction and as low as .139 between word-of-mouth and age of the respondents. On the
contrary, the independent variables which came out being insignificant delivered a high
.127 correlation between word-of-mouth and apathetic shopping motivation and a low .013
correlation between word-of-mouth and gender of the respondent.
Subsequently, the coefficients of determination show that the proportion of variation in
word-of-mouth explained by these individual significant predictors ranges from a low 1.9%
to a high 14.8%. Consequently, customer satisfaction seems to be the most important
antecedent of word-of-mouth individually explaining 14.8% of its variation.
4.4.2 Influence on attitudinal loyalty
The coefficients of the stepwise multiple regression analysis for the dependent variable
attitudinal loyalty are summarized in table A-28. The assessment of the predictors of
attitudinal loyalty provided similar results as those for the predictors of word-of-mouth
(see table 4.23; above). However, the set of independent variables that were significant

22
Predictors: (Constant), satisfaction, personalizing and income frequency
23
Predictors: (Constant), satisfaction, apathetic, card ownership and gender
- 67 -
- 67 -
changed considerably. The correlation between attitudinal loyalty and the set of
independents satisfaction, apathetic, adoption and gender is .545. These four
independent variables appear to explain 29.7% of the variation in attitudinal loyalty as
depicted by the coefficient of determination. Moreover, the analysis of variance used to test
the whether the model is significant ( 0 :
0
= multiple H ), provided an F-value of 15.602.
Based on this F-value the null-hypothesis can be rejected (Sig=.000). Consequently, the
model is significant with a reliability of 99.9%.
Additionally, the results of the single linear regression analysis between attitudinal loyalty
and each of the potential predictors individually are depicted in table A-29. The
correlations between attitudinal loyalty and each of these predictors individually appeared
to be as high as .369 between attitudinal loyalty and customer satisfaction and as low as
.136 between attitudinal loyalty and marital status of the respondents. On the contrary,
the independent variables which came out being insignificant delivered a slightly lower
correlation of .114 between attitudinal loyalty and education level of the respondent as the
highest correlation in that set.
Subsequently, a look at the coefficients of determination shows that the proportion of
variation in attitudinal loyalty explained by these individual significant predictors ranges
from a low 1.8% to a high 13.6%. Consequently, customer satisfaction seems to be the most
important antecedent of attitudinal loyalty individually explaining 13.6% of its variation.
Consequently, the Beta-coefficients shows that marital status of the respondent and
personalizing shopping motivation can be considered as predictors of attitudinal loyalty
with the minimally required reliability of 90%. Of the other significant predictors,
customer satisfaction and loyalty card adoption appear to have the highest reliabilities to
be considered as predictors of attitudinal loyalty.
4.4.3 Influence on repeat purchases
The coefficients of the logistic regression analysis (standard method) for the dependent
variable repeat purchases are summarized in table A-31. A model summary for the step-
wise method is depicted in table 4.24. The LL 2 value 99.817 shows that the model has
quite an imperfect fit. However, the Nagelkerke
2
R shows that as much as 56.9% of the
variation in repeat purchases is explained by the three independent variables.
Therefore, it can be concluded that the three independent variables economic, apathetic
and card adoption do affect behavioral loyalty as measured by repeat purchases.
When the standard method is used the variable economic seems to loose its significance,
however, the variables earners, acculturation and personalizing appear to be significant at
the 90% confidence level (see table A-31). Furthermore, it can be seen at the LL 2 value
that the model constructed through the standard method is less imperfect than the one by
the step-wise method. The
2
R illustrates that the total set of antecedents under
investigation explains 68.6% of the variation in repeat purchase behavior. However, this
higher
2
R should be interpreted cautiously since it can be the result of the higher number
of independent variables in the model. De Vocht (2000) suggests that the use of the
adjusted
2
R would be a better measure in such instances; however, the logistic regression
does not provide that statistic.
- 68 -
- 68 -
Table 4.24: Summary of stepwise logistic multiple regression analysis for variables predicting repeat
purchase behavior
Dependent variable repeat purchases
Predictor B
B
SE
e
B
Economic .2821* .1182 1.3259
Apathetic .4955** .1643 1.6413
Card ownership 3.3139*** .6245 27.4919
Constant -5.2307*** 1.2626 -
2
8.7259
Df 7
% of repeat purchase
(above median) 71.9%
LL 2 value
99.817
Nagelkerke
2
R
.569
Note: e
B
= exponentiated B &
B
SE =Std. Error of B
001 . * * * . 01 . * * . 05 . * < < < p p p
As resulted from the single logistic regression personalizing shopping motivation and
apathetic shopping motivation as well as customer satisfaction each is significant (with
99.9% reliability) for predicting repeat purchase behavior (see table A-32). Furthermore, it
is depicted that customer satisfaction has the ability to explain as much as 26.1% of the
variation in repeat purchase behavior. Personalizing shopping motivation takes 21.9% of
that variation individually on its part, whereas apathetic shopping motivation is able to
explain 14.4% of that variation individually. Still, none of these three predictors produced
a significant chi-square. But as shown by the LL 2 value these three predictors have the
lowest scores
24
. Consequently, they seem to be the ones with the less imperfect model fits.
The results of the logistic regression (standard method) for the dependent variable loyalty
program adoption are presented in this section. The model summary statistics for the
results of the step-wise method are depicted in table 4.25, whereas the results of the
standard method are summarized in table A-34.
4.4.4 Influence on loyalty program adoption
As was the case with the LL 2 value for the results discussed in the previous section, the
LL 2 value (161.030) in table 4.25 shows that this model does not have a quite perfect fit
either. However, contrary to the predictors of repeat purchase behavior, the Nagelkerke
2
R shows here that a relatively few 19.3% of the variation in loyalty program adoption is
explained by the sole significant independent variable. Still, loyalty program enjoyment
seems to affect loyalty program adoption.

24
Note hereby that the independent variables of which no chi-square could be produced are not considered in
the comparison of the likelihood values ( LL 2 ).
Antecedents of loyalty program adoption
- 69 -
- 69 -
Table 4.25: Summary of stepwise logistic multiple regression
analysis for card adoption
Dependent variable loyalty program adoption
25
Predictor B
B
SE
e
B
Enjoyment .9577*** .2313 2.6056
Constant -3.3274*** .9281 -
2
11.5476**
Df 4
% of adoption of focal
loyalty program 61.0%
LL 2 value
161.030
Nagelkerke
2
R
.193
Note: e
B
= exponentiated B &
B
SE = Std. Error of B
001 . * * * . 01 . * * . 05 . * < < < p p p
When the standard method is used the variable enjoyment seems to loose its significance,
however, it is still the only significant predictor found for loyalty program adoption as
depicted in table A-34 ( 05 . 0 . < Sig ). Additionally, the constant being the variable
adoption also looses its significance. As a matter of fact, the constant looses that much
that is significant merely at the 90% confidence level. Furthermore, there is a drop in the
LL 2 value as well. When the model is constructed with the standard method this
relatively smaller value of 150.436 shows that the model becomes less imperfect than the
one of the step-wise method. The
2
R value demonstrates that the total set of antecedents
under investigation explains a quite higher percentage (28.0%) of the variation in loyalty
card adoption. However, again caution has to be taken when interpreting this higher
2
R since it can be the result of the higher number of independent variables in the model as
well. Consequently, De Vocht (2000) suggests that a better measure for such instances
would be the adjusted
2
R ; however, as stated previously the logistic regression does not
provide that statistic.
On the other hand, the results of the single logistic regression show that gender of the
respondents, loyalty program enjoyment, idiosyncratic fit and loyalty program design each
is significant with at least 95% reliability for predicting loyalty card adoption (see table A-
35). Of the four predictors, gender of the respondent has the lowest reliability as predictor,
whereas loyalty program design is 99% reliable and loyalty program enjoyment and
idiosyncratic fit each is 99.9% reliable. Furthermore, it is depicted that loyalty program
enjoyment and idiosyncratic fit each individually and independently explains 15.8% of the
variation in loyalty card adoption. Both gender of the respondent and loyalty program
design perform weaker in explaining variations in loyalty card adoption, with gender of the
respondent taking care of explaining 5.5% and loyalty program design covering 9.5% of the
explanation. Still, only two of these four predictors produced a significant chi-square. Each
loyalty program enjoyment and idiosyncratic fit has a 95% significant chi-square, whereas
the chi-square corresponding to loyalty program design resulted being insignificant.
Finally, the significance of the chi-square for gender of the respondent was not given in the
output; since the degrees-of-freedom was lower than 1. Consequently, the Hosmer and
Lemeshow goodness-of-fit test was skipped. As shown by the LL 2 values the two
predictors with significant chi-square scores also have the lowest LL 2 scores. In this case

25
Predictors: (Constant) and enjoy
- 70 -
- 70 -
these two had the lowest LL 2 values overall, indifferent whether the chi-squares were
and their significance were calculated or not. Consequently, these two predictors seem to
be the ones providing the less imperfect model fits.
4 . 5 F u r t h e r a n a l y s i s o f t h e i n f l u e n c e s
Due to the limitations of regression analysis, which only assesses the existence of linear
relationships, this section discusses the differences between the linear relationship tests
and the non-linear relationship tests and gives some further comparisons between the two
linear relationship assessment techniques used here as a discussion.
Word-of-mouth
In order to facilitate the comparison between the results of the singular- and the multiple
regression analyses a combined overview of the influences was made as depicted in table
A-30. Regarding the influence of the antecedents of customer loyalty on word-of-mouth, the
results of the multiple linear regression analysis are quite similar to those of the single
linear regression analysis. The analysis of a single linear relationship between satisfaction
and word-of-mouth produced a model that was significant with 99.9% reliability as
shown by the F-value. This was also the case for the linear relationship between
personalizing and word-of-mouth. Furthermore, the Beta-coefficients of both these
independents plus those of the corresponding constants were also 99.9% reliable.
Therefore, these independents were highly expected to be in the list of independent
variables with the most significant predictable ability for word-of-mouth as obtained
through the multiple linear regression analysis. Similarly, income frequency had such high
reliabilities. Only the reliability of its predicting ability was below the 99.9% reliability
point the other two, as depicted in the table, were 99.9%. Consequently it was highly
anticipated to see income frequency on the list of reliable predictors of word-of-mouth.
However, what caused a surprise was that card ownership was not included in this set of
predictors. This was bizarre, especially seeing the inclusion of income frequency, which
had a less reliable coefficient. Still, the difference in reliability between the two was
minimal. Based on the deletion of card ownership, the deletion of the potential predictors
as was supported by the single linear regression models hedonic, utilitarian,
acculturation and age, was quite expectable.
The insignificance of a potential predictor of word-of-mouth based on regression analysis
results does not mean that there is no type of relationship between that particular
independent and word-of-mouth. Therefore, the possibility of existence of any other type of
relationship between word-of-mouth and potential predictors should be addressed. This
assessment was quite extensively addressed in the previous section; therefore, it will be
done really short here. In this regard, income frequency is the only customer characteristic
measure that appeared to have a significant influence on word-of-mouth as measured both
through linear relationship tests and non-linear relationship tests. Its reliability in the
non-linear relationship test was as high as 95%. On the contrary, gross income and
employment each had a non-linear relationship reliability of 90%, which is less than that
of income frequency.
- 71 -
- 71 -
Attitudinal loyalty
Regarding the antecedents of attitudinal loyalty, the significances of the different
determinants in the multiple linear regression analysis are quite analogous to those of the
single linear regression analysis (see table A-30). As was the case with word-of-mouth, the
analysis of a single linear relationship between satisfaction and attitudinal loyalty
produced a model that was significant with a reliability of 99.9% as suggested by the F-
value (see table A-29). This was also the case for the linear relationship between card
ownership and attitudinal loyalty. Furthermore, the Beta-coefficients of both these
independents plus those of the corresponding constants were also 99.9% reliable similar
to the relationship between satisfaction and attitudinal loyalty. Therefore, it was no
surprise to see these independents in the list of independent variables with the most
significant predictable ability for attitudinal loyalty as obtained through the multiple
linear regression analysis. Similarly, apathetic that had a model that is 99% reliable
coupled with 99% reliability for its predicting ability towards attitudinal loyalty, was no
surprise either on the list.
Contrarily, the results of the multiple linear regression analysis concerning the
reliabilities of apathetic, personalizing, employment, gender, marital status and gross
income were not as was anticipated. Here a distinction should be made between those
variables that did well in the single linear regression analysis and lost their predictable
ability in the multiple linear regression analysis and those that performed better in the
multiple linear regression analysis as compared to the single linear regression analysis. In
this regard, the variables personalizing, employment, marital status and gross income had
significant models, significant independent coefficients and dependent coefficient
(constant) with a minimum of at least 90% reliability each in the single linear regression
analyses. However, in the multiple linear regression analysis none of these four
independently significant predictors of attitudinal loyalty were reliable enough to pass at
least the 90% reliability cut-off point. On the contrary, gender only having a significant
dependent coefficient made even the 95% reliability cut-off point. This shows that
although there was some degree of consistency between the two regression analyses, there
were some shuffling in the reliable predictors of attitudinal loyalty as well.
Similarly, income frequency, education and age each had an insignificant model fit in the
single linear regression analysis and were also left out of the set of reliable predictors of
attitudinal loyalty through multiple linear regression analysis. Nevertheless, each appears
to have some type of influence on attitudinal loyalty, with a reliability of at least 90% as
shown by the none-linear relationship tests. Contrarily, employment and gross income
each has significant single linear model fits; the model fit for employment was 95%
reliable, whereas the one for gross income was as high as 99% reliable. Therefore, the 95%
reliability for the existence of some kind of relationship between each of these variables
and attitudinal loyalty is not surprising.
- 72 -
- 72 -
Repeat purchase behavior
Further comparison between the results of the single logistic regression analysis and the
standard logistic multiple regression analysis shows that there are quite some other
differences concerning the significant independent variables as depicted in table A-33.
These differences are supposed to be caused by the low fit of the model as depicted by the
significance of the chi-square. Earners for example which was not significant in the single
logistic regression analysis can be considered as a predictor of repeat purchase behavior
with 90% reliability based on the results of the standard logistic multiple regression
analysis. Similarly, acculturation and card ownership can be considered as predictors of
repeat purchase behavior with the same levels of reliability from results of the standard
logistic multiple regression analysis as compared to those of the single logistic regression
analysis where the constants appeared to be insignificant.
A comparison between the results of the standard logistic multiple regression analysis
and its stepwise counterpart illustrates that there are quite some differences between
these two analysis as well. Economic becomes significant at the 95% confidence level in
the stepwise method, while it was not significant in the standard method. Similarly, the
constant becomes significant even at the 99.9% confidence level, while in the standard
method it was insignificant. Card ownership maintains its reliability between the two
different analyses, producing the same significance results. The three variables
personalizing, acculturation and earners that could be considered significant with 90%
reliability as illustrated by the standard logistic multiple regression analysis, are each
insignificant as appears from the stepwise method. Last but not least, apathetic switches
from 95% reliability in the standard method to 99% reliability in the stepwise counterpart
thereby maintaining its influence on repeat purchase behavior between the methods.
At first site the results of the standard logistic multiple regression analysis concerning the
significance of the coefficients for personalizing and apathetic, appear strange. The higher
significance for apathetic may be questionable, since single logistic regression analysis
showed that the significance of the constant coupled with apathetic is lower. However, a
closer look to the critical values of the chi-square distribution table
26
shows that a chi-
square of 11.07 is required to be significant at the 5% significance level. As is shown in
table A-32, the chi-square corresponding to apathetic comes closer to this requirement.
This could be the explanation for the results of the standard logistic multiple regression
analysis regarding the coefficients of the two independent variables apathetic and
personalizing.
Remember that the relationships as discussed previously are all linear relationships.
Although the variables head of HH, employment, education and gross income do not have
any linear relationship with repeat purchase behavior, the same statement does not hold
for any type of relation. As illustrated in table A-33, with 99% reliability there is an
apparent influence of gross income on repeat purchase behavior. Similarly, there are
apparent influences at the 95% confidence level of both education and employment on
repeat purchase behavior. Additionally, there seems to be 90% reliability for the influence
of head of HH on repeat purchase behavior.

26
Source: Cooper and Schindler (2003) exhibit G-3
- 73 -
- 73 -
Card adoption
The results of the multiple logistic regression analysis are as expected from the logistic
single regression analysis with enjoyment as the sole predictor of card ownership based
on the existence of a linear relationship between the two. This exclusiveness in predicting
ability was anticipated, since the Beta-coefficient for enjoyment (.8509) was a bit higher
than that for idiosyncrasy (.7253). However, in the logistic single regression analysis
idiosyncrasy and enjoyment seemed to explain the same amount of variance in the
dependent variables variation (15.8%). And the difference in the LL 2 values enjoyment
(182.380) compared to idiosyncrasy (175.967) is quite small, however the LL 2 values
show that the model with idiosyncrasy as independent variable has a better fit.
Conversely, the stepwise method logistic multiple regression analysis illustrates that the
significance of both variables the dependent loyalty program adoption and the
independent enjoyment increase as compared with the results of the standard method.
Both variables coefficients become 99.9% reliable.
Furthermore, albeit the single logistic regression analysis results show that idiosyncrasy
also has a logistical linear relation with loyalty program adoption, this relationship is not
supported by either logistic multiple regression analyses. However, again a closer look to
the critical values of the chi-square distribution table
27
shows that chi-square values of
9.49 and 5.99 are required for enjoyment and idiosyncrasy respectively to be significant at
the 5% significance level. The chi-square corresponding to enjoyment is relatively greater
compared to the corresponding required chi-square statistic (see table A-35).
Further statistics of interest as depicted in table A-36 relate to privacy, gender and
design. When testing the logistic linear relationship between gender and card ownership
the chi-square could not be computed due to the existence of less than 1 degree of freedom.
However, the coefficients of both gender and the dependent card ownership seem to be at
least 90% reliable. Similarly, the coefficients of both design and the dependent card
ownership are reliable even at a higher 99% confidence level. But, in the analysis of this
relationship no significant chi-square statistic was found. Conversely, the analysis of the
relationship between privacy and card ownership produced a significant chi-square
statistic at the 90% confidence level. But in this case the coefficient for the dependent card
ownership was not significant. Only the significance of the coefficient of privacy was 90%
reliable.
Again, it should be noted that the apparent relationships as discussed above were all
linear relationships. Although gross income do not have a linear relationship with card
ownership and it was hard to find a linear relationship between gender and card
ownership, this same inexistence or difficulty does not hold for the existence of other types
of relationships. As illustrated in table A-36, with 99% reliability there is an apparent
probably non-linear influence of gross income on card ownership. Similarly, there is an
apparent influence at the 95% confidence level of gender on card ownership.

27
Source: Cooper and Schindler (2003) exhibit G-3
- 74 -
- 74 -
CHAPTER 5: CONCLUSIONS AND IMPLICATIONS
In this chapter the conclusions and implications that coincide with the covered topic are
discussed. These conclusions and implications should solve the main problem. Hence, for
the comprehensibility it is started by repeating the problem statement here:
5 . 1 C o n c l u s i o n s a n d d i s c u s s i o n
Conclusions
Concluding, a number of significant conclusions can be drawn from the results discussed
previously. Firstly, it was clear that Kong Fui had quite high overall customer satisfaction
scores. However, there are some aspects of customer satisfaction that performed less good
then other. These aspects on which Kong Fui performs relatively bad are service provided
by the cosmetics department personnel, the overall store cleanliness inside and the service
provided by the fresh meat department personnel. On the contrary, service provided at
check-out point, closely followed by friendliness of cashiers, service provided by baggers
and availability of everyday grocery items among others resulted in the customer
satisfaction aspects on which Kong Fui was relatively strong.
Secondly, not all the hypotheses
28
related the antecedents of customer loyalty could be
rejected
29
. Still, a distinction is made between those related to the behavioral part of
customer loyalty and those related to the attitudinal part of it. Both dimensions had some
hypotheses that could not be rejected. Concerning behavioral loyalty, there was sufficient
evidence for the existence of a positive effect of personalizing shopping orientation on
behavioral loyalty (hypothesis H1.1a). Similarly, behavioral loyalty seems to be influenced
positively by apathetic shopping motivation (hypothesis H1.3a). Customer satisfaction also
resulted to have a positive influence on behavioral loyalty (hypothesis H3.1a). Furthermore,
there was sufficient evidence for the existence of an effect of customers income level on
behavioral loyalty (hypothesis H5.4a). Acculturation preference also resulted having an
influence on behavioral loyalty (hypothesis H6a).
On the other hand, attitudinal loyalty seemed to be affected by customers age (hypothesis
H5.2b). Similarly, sufficient evidence was gotten for the existence of the influence of
educational level on attitudinal loyalty (hypothesis H5.3b). Customers income level also
appeared to have effects on attitudinal loyalty (hypothesis H5.4b). Last but not least, the
influence of income inflow frequency also seemed to be significant (hypothesis H5.6b).

28
Note that H3.2a and H3.2b were excluded from the analysis, due to the magnitude of the research and their
presumed lack of added-value for the completeness of this particular research. However, for the completeness
of the conceptual model, they were considered value additive. Refer to table A-37 for an overview of the
rejected and supported hypotheses.
29
Note that although regression analyses were used the hypotheses-testing were based on the non-linear
relationship tests.
Which are the shopping motivators affecting
customer loyalty?
- 75 -
- 75 -
The other hypotheses were rejected for differing reasons;
1. some hypothesized an influence of the predictor on customer loyalty on the opposite
direction as shown by the results, e.g. the utilitarian shopping motive appeared to
have a positive influence on behavioral loyalty as opposed by the hypothesis,
therefore the hypothesis was rejected
2. others just did not get sufficient evidence to support them, e.g. customer
satisfaction appeared to have no effect on attitudinal loyalty, thereby the likelihood
of a positive effect was even less, and
3. still others were only partially true as far as behavioral loyalty is concerned, e.g.
the presence of an influence of hedonic shopping motivation on behavioral loyalty
was supported only by repeat purchase behavior; word-of-mouth seemed to be
unaffected by the hedonic shopping motives
Thirdly, not all the propositions regarding the antecedents of loyalty program adoption
could be rejected. However, it is particularly peculiar that only propositions related to
customer characteristics were not rejected. In this regard, only gender and income level
resulted in predictors of loyalty program adoption. Thus, although the gender of the head
of household does not seem to be influential on the adoption of loyalty programs, the
gender of the customer does. However, household income appeared to be significantly
influential on loyalty program adoption (hypothesis HA4.2a). Even stronger, sufficient
evidence was gathered for the more focal proposition that middle income households are
more inclined to adopt loyalty programs than low and high income households
(hypothesis HA4.2b).
Fourthly, the assessments of linear relationships between the antecedents of customer
loyalty and customer loyalty also produced mixed results. Although there were great
similarities in the results of singular and multiple regression analyses, there were some
remarkable differences as well. In this regard, personalizing shopping motivation,
apathetic shopping motivation, customer satisfaction, loyalty card ownership, employment
status, marital status and income level each separately seemed to have significant linear
influences towards attitudinal loyalty. However, when all the studied potential predictors
are regressed against attitudinal loyalty only apathetic shopping motivation, customer
satisfaction and loyalty card ownership seem to maintain their importance for influencing
attitudinal loyalty. Additionally, gender of the customer becomes significantly influential
on attitudinal.
Similar relationships between the singular and multiple regression analysis were
obtained in the case of the different dimensions of behavioral loyalty. When measured
singularly personalizing shopping motivation, hedonic shopping motives, utilitarian
shopping motives, customer satisfaction, acculturation preference, loyalty card ownership,
income frequency and age each appeared to be influential for word-of-mouth. However,
when regressed as a set of independents only income frequency, customer satisfaction and
personalizing shopping motivation were strong enough to claim their linear influential
effect. Conversely, personalizing shopping motivation, apathetic shopping motivation and
customer satisfaction showed significant linear influential effects, when their
predictability for repeat purchase behavior was evaluated singularly. However, when the
overall model was evaluated by the set of independents only apathetic shopping motivation
had enough importance in predicting repeat purchase behavior as to be selected as a
predictor. And loyalty card ownership appeared to be a strong predictor when its
influential ability was assessed together with the other potential predictors.
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Fifthly, the evaluation of the linear relationships between loyalty card adoption and its
antecedents produced mixed results as well. Whereas the gender of the customer, loyalty
program enjoyment, loyalty program design and idiosyncrasy seemed to have individual
linear effects on loyalty program adoption, when their influence was assessed mutually
only loyalty program enjoyment showed significant influence.
Discussion
In this regard, the results are discussed in light of the goal of the research and the
research question. The data provided the ability to answer the research question. Although
the different techniques used provide some differences as to which are the predictors of
customer loyalty, some insight has been obtained as to which variables influence customer
loyalty. In this regard, it can be stated that the antecedents of customer loyalty are each of
the three shopper characteristics, both utilitarian and hedonic shopping motives,
customer satisfaction, acculturation preferences, loyalty card ownership, and some
customer characteristics. These customer characteristics are employment status of the
head of the household, frequency income inflow, level of education of the customer, gross
income of the household, age category of the respondent, gender of the head of household,
marital status, number of earners of income in the household and gender of the customer.
Thus although the each of these antecedents have different levels of influence and appear
to be insignificant in some of the analyses overall each of them appear to have some kind
of influence on customer loyalty.
Although some of the hypotheses were rejected, it is considered appropriate not to try to
put any link with the studies on which this one is based. This inappropriateness is based
on the fact that the results of this study were not validated. Furthermore, this study was
aimed to give some preliminary insight into the antecedents of customer loyalty and of
loyalty program adoption on Aruba and specifically at Kong Fui.
Another important issue concerning this study is that a distinction has to be made
between the non-linear relationship tests and the linear relationship tests assessed
through regressions. The regressions were used to test the fit of the conceptual model,
whereas the non-linear relationship tests were to assess whether there is any type of
relationship between the dependent variables customer loyalty and loyalty card adoption
and their respective antecedents. Therefore, the hypotheses were tested based on the non-
linear relationship test. The hypotheses did not propose the existence of linear
relationships between the dependents and their respective antecedents. They only
suggested some kind of effect.
What was remarkable as well was the influence of gender of the customer on the adoption
of loyalty programs. However, this can be assumed to the human nature of people, where
men are less inclined to bind themselves by contractual things such as membership cards
as opposed to women.
5 . 2 I m p l i c a t i o n s a n d e v a l u a t i o n
5.2.1 Implications for further research and evaluation
For a preliminary study, the results seem quite satisfactory. However, there is always
room for improvement due to the limitations. In this regard, there are some limitations
related to the collection of data and interpretation of the results. A first limitation might
be the exclusion of some important variables. In this regard, it would be suggested to
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look for ways of incorporating the assessment of the influence of some antecedents of
customer loyalty as studied in other contexts in the grocery retailing sector.
Secondly, this study focused on consumer-specific moderators of customer loyalty, but it
would be challenging to assess the role of other contingency- and moderating factors. For
example, it might be interesting to do some additional studies over different and several
grocery stores. This would benefit the ability to generalize the findings. Furthermore, the
relationships between customer loyalty and its antecedents are probably much more
complex than initially assumed. Therefore, apparently this study has looked only at a part
of the relationships. The way in which these relationships are moderated by e.g. the
product category including the distinction between food and non-food section of a
grocery store or the buying and usage process for that category is likely to influence
these relationships. Consequently, one suggestion for further research would be to study
the moderating power of such effects. Such studies would advance customer loyalty
research as well as be of great value for managers. Another important issue is the effect of
the customer satisfaction aspects as evaluated in this study directly or indirectly on
customer loyalty. In the food and grocery context it is possible that improvements in
friendliness of the cashiers, for example, would have a large effect through customer
satisfaction or even directly on customer loyalty for some shoppers. Consequently, a better
understanding of such interrelationships, coupled with a good knowledge of the customers
visiting the individual store, would be of great help for managers to efficiently increase
customer loyalty towards their store. Similarly, the assessment of customer loyalty per
product category as such could enhance the understanding of such interrelationships as
well.
A third potential limitation is related to the way that behavioral loyalty was measured
here. Since it was based on self-reports the true meaning may be only partially captured.
Therefore, and based on different studies questioning the predictive validity of self-
reported behavior (i.e. Morwitz, Steckel and Gupta, 1997), it would be advised to assess
behavioral loyalty through longitudinal studies or database information. In this regard, it
should be remembered that the results could be strengthened with access to behavioral
data on customer purchase histories that are not subject to potential recall loss (as advised
by DeWulf, Odekerken-Schrder and Iacobucci, 2001). The use of longitudinal data would
be particularly important to assess the effect of particular improvements related to the
offering of the store (s) under investigation. Thereby, the effect on behavioral loyalty could
be more directly discovered.
Fourth, another shortcoming in the study is common method bias (as in DeWulf,
Odekerken-Schrder and Iacobucci, 2001). This study based itself on one questionnaire
to measure all the constructs represented in the conceptual model. So, perhaps the
strength of the relationships among these constructs may be somewhat inflated.
Therefore, another suggestion would be to take the necessary steps in correcting this
possible bias or at least investigate whether the bias really exists.
A fifth shortcoming would lie in the analytical techniques used. Thereby, the use of more
advanced statistical applications, such as LISREL, as well as the validation of the model is
advised. These applications could possibly provide a better assessment of the overall model
fit and its validity.
Additionally, wider samples both in terms of number of clubs included and number of
respondents will probably facilitate improved results. Similarly, some issues were
raised by the findings related to loyalty card adoption as well. In this regard, especially
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consumers reasons for acquiring cards should be further assessed. Additionally, the
further investigation of the prevalence of multiple memberships and its influence on
customer loyalty is also suggested. Another suggestion for further research would be the
assessment of card loyalty e.g. as assessed by Mauri (2003). The determination of the
impact of multicollinearity on the results and the application of the necessary remedies
which lied outside the scope of this study, but were suggested by Hair et al. (2006) in their
coverage of multicollinearity are both suggested to be incorporated in further research as
well.
Consequently, these recognized limitations of this study together with the additional
advises based on potential room for improvement, could inspire researchers to define their
future research agendas.
Ultimately, the study report can be as a means for contrasting its findings against
previous research as stated previously. Consequently, its findings are subject to
comparisons and improvements when necessary e.g. the application of the necessary
remedies concerning multicollinearity if needed; as suggested by Hair et al. (2006).
Regardless, the idea of this writing has been to stimulate further advances in this
important and challenging area on Aruba and around the world.
Evaluation
Although the relationships identified by study mostly fit the theoretical predictions, there
is some degree of contradiction as well. Support was found for various hypotheses as
adopted from prior research. Still, some seemed insignificant in this context as covered
previously. Hence, this is precisely one of the contributions of this research. It further
expands the extensive set of studies on food and grocery shopping thereby further
enhancing the ability to contrast findings against previous research in the same branch, as
reasoned by Jamal et al. (2006). This contrasting ability is further enhance by the main
contribution of this research as to it was based on the investigation of determinants of
customer loyalty in a grocery context in a small economy.
Referring to the other reason of Jamal et al. (2006) grocery shopping is an ongoing and
essential activity whereby consumer decision-making within the grocery environment can
be highly involving to study food and grocery shopping it can not be said with precision
whether this is the case in this population or not. Still, it was not the objective either to
investigate this. However, their reasoning that is well supported in this research is that
the Western grocery shopping context is influenced by hedonic feelings.
Last but not least, the study gives useful insight into the antecedents of customer loyalty
in a grocery context on a small island where the vast majority of products are being
imported. However, a validation of the results would have further embraced the strength
of the study-report.
In evaluating the research process, it should be noted that no matter how good things are
planned, there will almost always be deviations from the plans. For example, although the
idea was to use the equation for assessing loyalty as proposed by Day (1969), this was not
possible due to the categorical measure for behavioral loyalty used. Still, the determinants
of loyalty have been assessed here, by looking at the determinants of both behavioral- and
attitudinal loyalty separately, was necessary anyhow to test the hypotheses.
Concerning the data collection, it was planned to hold the survey during a weekend and
some days of the subsequent week. Furthermore, it was thought that the period being
the end of the month would guarantee sufficient respondents in that short period.
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However, that turned out not to be the case. Therefore, the decision had to be made to
prolong the survey period.
The adaptation in the scaling related to the item How satisfied are you with Kong Fui
Supermarket? appeared not to be a good option for the analysis. Due to this adaptation in
the scaling, it was difficult to construct a combined variable representing the mean of the
three items of customer satisfaction. Therefore, a solution was found in recoding the
answers of that particular question into a new 5-point scale, whereby a new classification
30
was maintained. The idea behind the usage of such a classification was not to bias the
distribution of the combined measure, whereby class means are used for the item How
satisfied are you with Kong Fui Supermarket?
5.2.2 Managerial implications
As far as the managerial implications are concerned, the results of the analysis revealed
different options available to the management of Kong Fui to answer the problem they are
dealing with. However, for clarity reasons this problem is presented again here, prior to
the discussion of the possible actions to be undertaken.
In order to increase the purchases of their current membership-card owners, the following
options seem to be available and the corresponding recommendations are as follows:
Recommendation 1:
Firstly, it is recommended to the management of Kong Fui to make sure that a shopping
experience is offered in the supermarket. This is extremely important, since the shoppers
of Kong Fui do not consider the core product as the reason for coming back. Instead of
basing their decision to come back on the product they are shopping for, they rate both
personalizing and apathetic shopping motivation as determinants for their repeat visit.
This is extremely important in this context, since there is such a concentration of
supermarkets on the small island of Aruba, that it is vital for a supermarket striving for
continuity to present a value-offering to the customers, rather than the core product-
offering. This need for offering service as supplementary to the core product further
supports the necessity of applying the necessary chances as would be advised in the next
recommendation.
Recommendation 2:
The second recommendation concerns the customer satisfaction enhancing aspects. Due to
the importance of customer satisfaction for customer loyalty as resulted from this study
and is supported by many prior studies, it is advised to concentrate on the aspects where
Kong Fui is not performing so well. These customer satisfaction enhancing aspects include
service provided by the cosmetics department personnel, the overall store cleanliness
inside and the service provided by the fresh meat department personnel. Consequently, it

30
1-2-3-4-5 1.5-3.5-5.5-7.5-9.5
What can be done to increase the purchases of their
current customers?
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is advised to take care especially of these two service aspects. Both are related to
departments of the grocery store where the customer comes in direct contact with the
personnel. Thereby, there is communication between the customer and your personnel.
Apparently the dissatisfaction with these services is caused by this communication.
Thereby, it would be recommended to take a closer look at these aspects. And if
communication is really the cause and more specifically the language barrier than it would
be suggested to at least make sure that the personnel in these departments can
understand and talk the host language by providing them teaching possibilities.
The essentiality of this suggestion further lies in the in the importance that is given to
acculturation preference and its influencing power towards repeat purchase behavior and
word-of-mouth.
Similarly, it is recommended to take a closer look to the overall cleanliness aspect in the
store and make the necessary changes to provide an overall clean shopping environment.
On the contrary it is recommended to make sure that the relatively strong position of the
remaining aspects is guarded and if possible even improved.
The lack of guaranteeing an improvement in the customer satisfaction aspects performing
poor would possibly have a direct impact on the value-proposition since the total value
offering would not be suitable without the necessary improvements. Consequently, it will
lead to further drop in the repeat purchases and possibly even lead to clients leaving Kong
Fui and patronizing other supermarkets
Recommendation 3:
Furthermore, related to who are the behaviorally loyal customers, it is suggested to do
some further analysis in order to assess this. This would be important since this study
shows that customers with lower levels of income are more inclined to come back and to
spread word-of-mouth. Consequently, although the high earners are the ones who possibly
would spend more with each visit, on the long run it is possible that the low earners are
more profitable for the supermarket anyhow.
Recommendation 4:
Last but not least, it is advised to try everything that is manageable to get more program
subscribers. Especially, the saving abilities of the program would be crucial in this regard.
Therefore, it is suggested to come up with campaigns to make customers and potential
customers aware of the benefits of subscription to the program. Once the customers know
that they get discounts besides the gifts that are available at years end the chances are
considerable that they will stick to Kong Fui for their periodic purchases. Although this
does not have any instantaneous income potential such as subscription fees, the results
showed that card ownership is a significant predictor for repeat purchase behavior.
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