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Factors Influencing Store LoyaltyBRM Project (Interim Report)

Prepared for
Dr. Sridhar Vaithianathan
Professor- Business Research Methods

By
Anurag Sarkar
Shantanu Srivastava
Aayushi Pathak
Bharat Khosla
Mahender Konda

IMT, Hyderabad
BATCH 2015-17

Abstract

Our main motivation to undertake the project is to establish a theoretical framework in


relation to the benefits and attractions sought by store-loyal customers which may be
used by various stores to acquire store loyal buyers.
The research examines the influence of demographic and behavioral factors related to
store loyalty among respondents and on the basis of that determine the significance of
each factor and state what customer loyalty is based on.

Table of Contents
Abstract.....................................................................................................................................2
Literature review........................................................................................................................4
Important findings from Literature Review...............................................................................6
Research Objective...................................................................................................................7
Research Methodology.............................................................................................................8
Questionnaire Design.................................................................................................................9
Analysis...................................................................................................................................11
Managerial Implications/Contributions...............................................................................12
Research Limitations.............................................................................................................12
References...............................................................................................................................13

Literature review
Details of various research paper referred to during the course of study:
Paper information

Objective of the paper

Variables studied in the


paper
Subhashini Kaul, IIM,
A Conceptual Note on
Advertising by the
Ahmedabad- Research
Influencing Store Loyalty:
store
Publication (2006)
Implications for Indian Retailers
Physical
characteristics of the
store
Convenience of
reaching the store
Friends and the store
Merchandize
selection
Store personnel
Prices charged by
the store
Chiu-Han Wang Sejin Ha,
Store attributes influencing
post-transaction
Journal of Fashion Marketing
relationship marketing: a study of
service
and Management: An
department
direct mail
International Journal, vol.
stores
interpersonal
15(2011)
communication
Merchandise
preferential
treatment
Anne Magi, Stockholm School STORE LOYALTY? - an
interpersonal
Of Economics, The Economic Empirical Study of Grocery
communication
Research Institute(1999)
Shopping
Merchandise
preferential
treatment
Piyali Ghosh, et. al., Journal
Customer expectations of store
Location
of Retail & Leisure Property
attributes: A study of organized
Price reduction
(2010)
retail outlets in India
Outlet atmosphere
Flooring
Lighting, music and
odor
Sales personnel
Merchandise
Mercedes Martos-Partal, et.
Studying motivations of store
Price and
al.,
loyal buyers across alternative
promotional
European Management Journal measures of behavioural loyalty
sensitivity
(2013)
Time pressures
4

Nicole Koschate-Fischer, et.


al., Journal of Marketing,
America(2014)

Moderating Effects of the


Relationship Between Private
Label Share and Store Loyalty

Fazlul K. Rabbanee et. al.,


Journal of Retailing and
Consumer Services(2012)

Effects of store loyalty


shopping mall loyalty

on

Service quality
sensitivity
Shopping enjoyment
Innovativeness
Price-oriented
behaviour
Degree of
commoditization
Product category
involvement
Retailer price
positioning
Household size
Household net
income
Age of main
shopper
Private label
propensity
Distance to relevant
store
Location
Price reduction
Outlet atmosphere
Flooring
Lighting, music and
odour
Sales personnel
Merchandise

Literature review provided us with probable factors which formed the crux of our
research and on the basis of which the questionnaires were formed.
The various factors taken from the review are1. Advertising by the store
2. Physical characteristics of the store
3. Convenience of reaching the store
4. Friends and the store
5. Merchandize selection
6. Store personnel
7. Prices charged by the store

From these factors on the basis of research the most appropriate for the given case will
be chosen.

Important findings from Literature Review


It has been found that:

Physical characteristics of the store


Merchandize selection
Store personnel
Prices charged by the store

Play an important part in the determination of store loyalty.


In our current study we have incorporated these variables.

Model followed from the literature review:

Ref: Subhashini Kaul, IIM, A. Conceptual Note on Influencing Store Loyalty: Implications
for Indian Retailers Ahmedabad- Research Publication (2006)

Research Objective
To study and determine the factors influencing store loyalty of buyers of varied
demographics on behavioral factors related to their perception of their favorite store.

Research Methodology
1. Factor Determination from literature review.
2. Sample type: Empirical and quantitative.
3. Data Collection Method: Questionnaire using Likert scale.
4. Sample size: Sample size determined using the rule of thumb of no. of questions used
in the questionnaire multiplied by 5.
5. Respondents:

The number respondents are chosen based on the sample size determined.

We are focusing on the age bracket of 20-64 with subgroups as per the population
data.

Age is the only demographic factor taken into consideration.

6. Statistical Techniques: Discriminant Analysis


7. Statistical tool: SPSS, Microsoft Excel.
Sample size determination:
Sample size is determined using the rule of thumb of questions used in the
questionnaire multiplied by 5.
We have 30 questions (excluding the demographic information), therefore, we are
lloking at a sample size of 150.

Questionnaire Design
We have based our Questionnaire design on the following papers:
Anne Magi, STORE LOYALTY? - an Empirical Study of Grocery Shopping: Stockholm
School Of Economics, The Economic Research Institute (1999)
Nicole Koschate-Fischer, et. al., Moderating Effects of the Relationship between Private
Label Share and Store Loyalty: Journal of Marketing, America (2014)

Factors

physical characteristics

Literature
Review referred
to
Subhashini Kaul,
IIM, A Conceptual
Note on
Influencing Store
Loyalty:
Implications for
Indian Retailers
AhmedabadResearch
Publication (2006)

Sample questions

This store has a


well-organized
layout (easy to
search for
products)
This store has a
spacious layout

Meaning of Factor

Store Personnel

Nicole KoschateFischer, et. al.,


Moderating
Effects of the
Relationship
Between Private
Label Share and
Store Loyalty
Journal of
Marketing,
America(2014)
9

I have a personal
contact with the
store staff
The store
personnel
recognizes me

Cleanliness
of store
Attractivenes
s of store
Ease of
finding items
Ease of
moving
through the
store
Speed of
Checkout
Courtesy of
Personnel
Friendliness
of personnel
Helpfulness
of personnel
Number of
personnel

Advertising/promotions/convenie
nce of purchases

Merchandize selection

Price charged

Convenience of reaching

Friends perceptions of and their


recommendations

Mercedes
Martos-Partal,
et. al., Studying
motivations of
store loyal buyers
across alternative
measures of
behavioural
loyalty,
European
Management
Journal (2013)
Subhashini Kaul,
IIM, A Conceptual
Note on
Influencing Store
Loyalty:
Implications for
Indian Retailers
AhmedabadResearch
Publication (2006)
Nicole KoschateFischer, et. al.,
Moderating
Effects of the

I read stores
advertisements in
news papers
I read the leaflets
sent to my home
by the store

Price at this store


is lower than
other stores I
know of
The store has
attractive loyalty
schemes

Subhashini Kaul,
IIM, A Conceptual
Note on
Influencing Store
Loyalty:
Implications for
Indian Retailers
AhmedabadResearch
Publication (2006)

It takes you 15
more minutes to
get to this store as
compared to your
current store?

Subhashini Kaul,
IIM, A Conceptual
Note on
Influencing Store

A
recommendation
by a friend is
more than enough

10

The store sells


fresh fruits,
vegetables and
other perishable
products

Informativen
ess of ads
Helpfulness
of ads
Appeal of
ads
Believability
of ads
Frequency of
ads
Degree of
Selection
Level of
Stocks
Number of
Brands

The store stocks


well-known
brands

Relative level
of prices
Level of
value

Nearness of
location
Time
required to
reach the
store
Ease of drive
Convenience
of other
stores
Known to
friends
Liked by

Loyalty:
Implications for
Indian Retailers
AhmedabadResearch
Publication (2006)

for me to try out a


new store
Number of
acquaintances
going to a store
changes my
perception about
the store

friends
Recommende
d by friends
Number of
friends
patronizing

Link to the actual questionnaire:


https://docs.google.com/forms/d/1urbtOF5j51saQAruv6r2P-RjYNjhqP3p9dG645jBEDs/edit?
usp=sharing

11

Analysis
Simple discriminant analysis will be performed on the sample data to find out the variables
which have higher power of discriminating between loyal and not-loyal buyers.
Discriminant analysis is a classification technique, where two or more groups or clusters or
populations are known (a priori) and one or more new observations are classified into one of
the known populations based on the measured characteristics.

12

Managerial Implications/Contributions
The study will establish a theoretical framework and provide a model related to the
motivations and benefits sought by store-loyal customers which may be used by various
stores to acquire store loyal buyers.

Research Limitations
Due to time constraint the sample size may not be adequate, however, a more extensive
research on a larger sample would yield better results in terms of understanding the factors
taken into consideration.

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References
Fazlul K. Rabbanee a,n , B. Ramaseshan a , Chen Wu b ,Amy Vinden Effects of store
loyalty on shopping mall loyalty: Journal of Retailing and Consumer Services ,(2011)
Nicole Koschate-Fischer, et. al., Moderating Effects of the Relationship Between Private
Label Share and Store Loyalty Journal of Marketing, America (2014)
Mercedes Martos-Partal, et. al., Studying motivations of store loyal buyers across
alternative measures of behavioural loyalty, European Management Journal (2013)
Subhashini Kaul.A, Conceptual Note on Influencing Store Loyalty:Implications for
Indian Retailers. INDIAN INSTITUTE OF MANAGEMENT, AHMEDABAD (2006)
Ailawadi, Kusum L. and Kevin Lane Keller, Understanding Retail Branding,
Conceptual Insights and Research Priorities, Journal of Retailing, 80 (4), 33142,
(2004)
Chiu-Han Wang Sejin Ha, "Store attributes influencing relationship marketing: a study
of department stores", Journal of Fashion Marketing and Management: An International
Journal, Vol. 15 Iss 3 pp. 326 -344, (2011)
Anne Magi, STORE LOYALTY?- an Empirical Study of Grocery Shopping: Stockholm
School Of Economics, The Economic Research Institute, (1999)
Piyali Ghosh, et. al., Customer expectations of store attributes: A study of organized
retail outlets in India Journal of Retail & Leisure Property (2010)

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