Date of Award

1-1-2001

Degree Type

Thesis

Degree Name

Master of Business

Faculty

Faculty of Business and Public Management

First Advisor

Dr Simone Pettigrew

Abstract

A paradigm shift from mass marketing to the concentrated focus on one-to-one marketing has led to a barrage of tactical strategies to instill long-tern consumer loyalty among organisations' most valued customers. At the forefronts of these strategies are customer loyalty programs. Since the inception of the first loyalty program, AAdvantage in 1981, the marketplace has seen a proliferation of these programs across a widening range of industries. Not surprisingly, this has led to significant interest in customer loyalty programs among academics and practitioners. Despite the skepticism of academics relating to the effects of loyalty programs, many organisations have allocated a large amount of the or marketing budgets to developing, implementing and maintaining customer loyalty programs in the hope of generating long-term loyalty in customers. To date, current evaluations of customer loyalty programs have assessed the effects of these programs by focussing on behavioural measures (such as repeat purchases) and on economic outcomes (such as market share, penetration and share of wallet.) While these traditional measures have contributed to the understanding of consumer loyalty and evaluations of a program’s success, it has been recognised by researchers that the measures are inadequate to determine and explain the loyalty-building attributes of loyalty programs. Moreover, studies from the viewpoint of consumers remain lacking. In an attempt to bridge the gap, this qualitative study explores the attributes of customer loyalty programs that result in consumer loyalty to brands from the perspective of the consumer. The fundamental significance of this study is the integration of the behavioural and the attitudinal theoretical approaches used to investigate these attributes. In addition to this integrative approach, the study incorporates theories from relationship marketing. The components of loyalty and attributes of loyalty programs that were investigated were drawn from an extensive review of the brand loyalty, relationship marketing and customer loyalty program literatures. These components and attributes were deemed to be the most significant in establishing long-term consumer loyalty. The data for this qualitative study were derived from twenty-four semi-structured focused interviews with consumers who qualified as members of customer loyalty programs. The tentative conclusions drawn from this research are that from consumer’s points of view: (i) the act of loyalty is exhibited by the continual repeat purchase of the same product from the same store, (ii) the key to a successful customer loyalty program is the implementation of a program that is flexible to its members, (iii) the key to a defensive orientated loyalty program is a good incentive structure and an effective communication program, and (iv) the development and sustenance of a relationship between a consumer and an organisation is vital to the brand loyalty process. The results of this exploratory study provide a deeper understanding of the customer loyalty program phenomenon and the identification of program attributes that result in long-term consumer loyalty from the perspective of consumers. This research highlights that further investigation is required into the loyalty-building attributes of customer loyalty programs, and this will be central to the development of loyalty programs that satisfy consumers and effectively establish long-term loyalty to brands.

Included in

Business Commons

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